Construction of the Roghun hydroelectric power plant (HPP) will be going on due to sale of public bonds (Eurobonds) to creditors. Accordingly, 500 million USD raised from sale of public bonds will cost us 850 million USD taking into account 7.125% interest rate. How will we repay this amount?
Recall, Tajikistan has appointed Citigroup and Raiffeisen Bank International as joint lead managers for a debut US dollar Eurobond. Tajikistan has raised $500 million with its first international bond issue to help fund the construction of the Roghun hydropower plant.
Tajikistan's 10-year bonds were placed on Sept. 7 with a yield of 7.125%. The bankers handling the deal had originally signaled a yield of 8% but demand was strong, with bids exceeding $4 billion. S&P Global Poor's gave the bond a B- rating while Moody's Investor Service put it as B3.
According to the data from the National Bank of Tajikistan (NBT), the public bonds were sold to managing funds (85 percent), hedge funds (9 percent) as well as banks and other financial institutions (6 percent).
Tajikistan intends to sell electricity generated by the first two of six units of the Roghun HPP to Afghanistan and Pakistan to raise funds to complete the hydropower plant and recoup investments.
The first unit of the Roghun HPP is expected to be introduced into operation in November this year, followed by the second one in May of the next year. It means that we can count on electricity generated by these units in the second half-year of 2019.
However, that is going to have to wait, because supply of electricity to Afghanistan and Pakistan in comparatively large volumes will be possible only after construction of the regional high voltage power transmission line (CASA 1000), which is expected to be introduced into operation no earlier than 2022.
Meanwhile, neighboring Uzbekistan could be considered as potential buyer for Tajik electricity, but Uzbekistan will hardly agree to pay at the same rates as Afghanistan and Pakistan are expected to pay.
Therefore, the most real buyer for electricity that will be generated by the first two units of the Roghun hydropower plant is the Tajik Aluminum Company (TALCO), which intends to construct a new aluminum smelter until 2020.
What will be TALCO’s requirements in electricity and whether we should wait for profit from sale of that electricity?
More detailed information read in today’s issue of Asia-Plus newspaper.
