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EBRD to finance modernization of Tajik Qairokkum HPP

3 September 2014 16:57 (UTC+04:00)
EBRD to finance modernization of Tajik Qairokkum HPP

By Aynur Jafarova

The European Bank for Reconstruction and Development (EBRD) will allocate $75.7 million to the first phase of modernization of Tajikistan's Qairokkum hydropower plant and will involve rehabilitation of two of the plant's six turbines, increasing capacity from 126 MW to 142 MW.

This is EBRD's largest and most complex project to date in Tajikistan and includes $21 million in donor funds - a $10 million loan and $11 million grant from the Pilot Program for Climate Resilience (PPCR).

A further $4.7 million in technical cooperation grants has been provided by Austria, the UK and the EBRD's Shareholder Special Fund.

Enhanced efficiency and more modern equipment are just part of this project's story. Aida Sitdikova, Director for Energy and Natural Resources believes increased efficiency means increased capacity in an area of Tajikistan where interruptions of energy supply are endemic.

"Upgrading the plant will provide more energy using the same amount of water. Modern, safer equipment also means fewer wasteful water spills," she said.

Electrical outages across Tajikistan are estimated to cause total losses of some $200 million and are perceived by businesses as the number one obstacle to private enterprise.

More important perhaps is the impact beyond that on the economy. People in rural areas who suffer from long interruptions in power turn to burning solid fuels like wood and coal for heat indoors, having a deleterious impact on health and the environment.

Tajikistan's hydropower plants are dependent upon river basins fed by glacial and snow melt. With hydropower the predominant source of its electricity, the entire energy system is vulnerable to extreme weather events exacerbated by climate change.

So the development of the Qairokkum project included detailed climate change analysis and novel co-financing from the Climate Investment Funds' PPCR - the single largest climate change adaptation project in the EBRD's history.

The scope for hydropower in Tajikistan is enormous. The country has a total installed capacity of 5,157 MW. Yet only 57 percent is currently available to produce electricity, indicating an urgent need for further modernization and rehabilitation.

"This is just the first step down a long road lined with potential," Richard Jones, the EBRD's Head of Office in Dushanbe said. "Prudent, far-sighted further investment in hydropower and energy efficiency means a brighter future for Tajikistan."

The EBRD operations in Tajikistan started in 1992 with technical cooperation, with the first investments in 1996. During this time, the EBRD has concentrated on private sector development, which accounts for over 70 percent of the Bank's investment there.

Board of Directors of EBRD has approved a new country strategy for Tajikistan which will define the Bank's activities in that country for the next three years from 2012 to 2015.

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