The Tajik government has directed relevant agencies to approve and sign a draft agreement with Kazakhstan on cooperation in the energy sector.
The document, which outlines the supply of electricity from the Roghun hydropower plant to Kazakhstan, has been published on the legal information portal of Tajikistan's Ministry of Justice.
According to the draft agreement, the planned Roghun electricity supplies will be conducted via interstate power transmission lines, based on the technical capabilities of neighboring countries for transit.
Kazakhstan's Settlement and Financial Center for Support of Renewable Energy Sources, a subsidiary of the country’s Ministry of Energy, will sign a supply agreement with the Open Joint-Stock Company (OJSC) Roghun NBO under the terms of the agreement.
The agreement is valid for 20 years, with an option for a 10-year extension.
The planned volume of electricity will be supplied from the Roghun hydropower plant exclusively during deficit hours in the North-South zone of Kazakhstan’s unified energy system. The estimated supply volume specified in the agreement will not create financial or other obligations between the seller and the buyer.
The transit of electricity to the Kazakhstan border will be handled by the OJSC Roghun NBO.
The cost of electricity will be set at 3.4 US cents per kilowatt-hour (including VAT at a zero rate), based on approved daily supply schedules.
The cost of transit will be determined based on the seller's incurred expenses for electricity transit through neighboring Central Asian countries to the Kazakhstan border, with expenses verified by the seller.
Electricity pricing will be indexed annually, starting in the second year of supply, based on the US Producer Price Index published by the US Department of Labor and Bureau of Statistics.
Exports as a condition for external investments
The availability of electricity supply agreements with Kazakhstan and Uzbekistan is a key condition for external financing of the Roghun HPP project.
According to a recent sovereign rating rationale for Tajikistan by Standard & Poor’s Global Ratings, the Tajik government is negotiating with a consortium of multilateral lenders and bilateral lenders to secure a financing package that will cover about 50% of the Roghun HPP project’s costs. The remaining funds are expected to come from the state budget and revenues generated by the hydropower plant.
Analysts at S&P note that the preliminary external financing package includes US$1.73 billion in semi-concessional loans, $850 million in grants, and $390 million in concessional loans. External financing will become available after Tajikistan finalizes electricity supply agreements with Kazakhstan and Uzbekistan.
About Roghun hydropower plant
The Roghun HPP is a hydropower complex designed as a multi-purpose dam for generating electricity, regulating water and reducing the risk of floods and droughts. With a height of 335 meters, the dam will be the tallest in the world. In addition to meeting Tajikistan’s energy demand, the facility is also expected to generate electricity for export to neighboring countries, promoting the use of renewable and clear energy and reducing carbon emissions.
OJSC Roghun NBO was founded in April 2008 after the Tajik government formally revoked a contract with Russia's RusAl aluminum company for the construction of the Roghun hydropower plant in August 2007.
In 2016, the Italian company Salini Impregilo (currently WeBuild) was contracted to implement the Roghun project.
The hydropower plant is expected to have six turbines with combined capacity of 3600 MW. The first two generating units of the Roghun hydropower plant were introduced into operation in November 2018 and September 2019 to much clamor, but there has been limited progress since then. The third unit is expected to be introduced into operation in 2025.
When complete, it is expected to produce 17.1 TWh of electrical work per year.
In 2023, 2.6 billion somonis (TJS) were allocated from the state budget for the continuation of construction work on the Roghun hydropower plant. However, to accelerate the pace of the project, the government additionally allocated another 2.6 billion somonis.
For 2024, the state budget has reportedly allocated 2.8 billion somonis for the continuation of the construction work. However, in order to further expand the construction and installation activities, nearly 3.5 billion somonis have already been spent from the state budget in the first nine months of this year.
In general, during the period of 2008-2024, more than 42.5 billion somonis have reportedly been allocated from the state budget and other sources for the construction and restoration of the power plant
