On Tuesday December 17, the World Bank approved a $350 million International Development Association (IDA) grant as part of the first phase of a program to help Tajikistan finance the completion of the Roghun Hydropower Project (HPP).
Press release issued by the World Bank notes that with a projected installed capacity of 3,780 Megawatts, the Roghun hydropower plant will provide about 10 million people in Tajikistan with better access to electricity and help alleviate power shortages that have become persistent during the winter months. In addition, about 70 percent of the electricity generated by the Roghun hydropower plant will be exported to Kazakhstan and Uzbekistan to replace fossil fuel generation at an affordable price, thus reducing greenhouse gas emissions.
“The Roghun Hydropower Project can help Tajikistan and countries in Central Asia to accelerate their path to adopting clean energy, boost economic growth, and enhance climate resilience,” said Antonella Bassani, the World Bank Vice-President for Europe and Central Asia. “Once the project is completed, households and businesses will be able to rely on much needed uninterrupted, affordable, and clean energy supply. The World Bank brings substantial knowledge and experience to a project of this scale, from economic reforms to implementing large infrastructure under robust environmental and social standards.”
Given the complexities of the project, enhanced supervision arrangements will be in place to ensure that the project is implemented to the best international standards, promoting robust financial, environmental, and social practices.
The Government of Tajikistan has committed to allocate 3 percent from electricity sales to a nationwide Benefit Sharing Program (BSP) to finance pro-poor social support and augment social safety nets during the construction period, which will increase to 5 percent after the end of construction. The proceeds are expected to address various priority social needs of vulnerable populations through existing safety net programs.
The Roghun HPP will require US$6.29 billion to complete, which will be financed by project revenues, domestic resources and development partners. This investment in the Roghun HPP will help facilitate US$2.97 billion in grants and concessional funds from a group of development partners and investors, including the World Bank, the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), European Union (EU), Islamic Development Bank (IsDB), OPEC Fund for International Development, Saudi Fund, Abu Dhabi Fund, Kuwait Fund, and potentially other partners.
This collective support can foster broader economic reforms in the country and keep the project from tying up too much of the government’s budget and crowding out resources from economic development and critical services like healthcare and education. It can also lower the country’s risk of debt distress to avoid jeopardizing its growth prospects.
“Roghun HPP is an important regional project,” said Charles Cormier, World Bank Director for Infrastructure in Europe and Central Asia. “In addition to alleviating energy shortages in Tajikistan and helping decarbonize grids in fossil-dependent Kazakhstan and Uzbekistan, Roghun HPP can help balance services for intermittent sources like solar and wind to accelerate the clean energy transition in the region. Once completed, it will promote the development of a regional electricity market and enhance regional cooperation on energy.”
The Roghun HPP will strengthen water security and climate resilience in the region. Using the storage capacity available in the reservoir, the Roghun hydropower plant will help protect downstream hydropower projects and areas from extreme flooding.
