Fifteen years ago, on January 6, 2010, Tajikistan launched a massive sale of shares to fund the construction of the Roghun hydropower plant. The sale of Roghun shares has reportedly earned the government a total of 890 million somonis. What became of these funds, and when will shareholders see any returns?
The government issued 5 million securities worth 6 billion somonis, with over 580 sales points established nationwide through branches of the state-run bank Amonatbonk (Tajikistan’s savings bank). Citizens and legal entities could purchase shares in cash or via bank transfers.
While the president’s decree stipulated voluntary participation, there were instances where authorities pressured individuals to buy shares. Even students were compelled to purchase shares worth 100.00 somonis.
Formation of the joint-stock company
Tajikistan founded the Open Joint-Stock Company (OJSC) NBO Roghun with an authorized capital of 116 million somonis for completing the construction of the Roghun hydropower plant in April 2008 after it formally revoked a contract with Russia''s RusAl aluminum company for the construction of the Roghun hydropower plant in August 2007. The Tajik government accused the Russian company of failing to fulfill the contract signed in 2004. Tajik authorities and RusAl became bogged down in the hydropower dam model and height, crucial factors in its capacity.
To raise funds to complete construction of the Roghun hydropower plant, the government started to sell shares in Roghun to people on January 6, 2010. Tajikistan has reportedly issued 6 billion somonis worth of Roghun shares.
Shares were available in denominations of 100, 500, 1,000, and 5,000 somonis. Only the 5,000-somoni shares were personalized, with the buyer's name indicated, restricting their resale to others. The sale of these shares had to occur through the stock exchange.
The sale of Roghun shares has reportedly earned the government 890 million somonis.
22,000 people are reportedly holders of the Certificates of Shares (the face value of one Certificate of Shares is 5,000 somonis) and nearly 2 million people are holders of shares of the face values of 100, 500 and 1,000 somonis.
Per the company's charter, dividends will only be paid after the plant is fully operational. Until then, shareholders cannot demand profits or sell their shares publicly. Only after all six units of the Roghun hydropower plant are introduced into operation and construction is officially completed will shareholders see returns.
Annual shareholder meetings provide updates on progress.
Where did the money go?
The campaign ended after intervention from the International Monetary Fund (IMF), which warned that collecting such large sums could slow Tajikistan’s economic growth by 1.0% and reduce private sector investment.
Two months after the funds were raised, inflation had already eroded 2.0% of the total amount. The Ministry of Finance decided to allocate 175 million somonis as loans to five commercial banks at an annual interest rate of 10%.
One year later, then-Minister of Finance Safarali Najmiddinov announced that these loans had generated 11.9 million somonis in profits.
According to authorities, the funds have since been spent, primarily on equipment for the plant’s construction.
