EBRD approves new strategy for Tajikistan
By Vusala Abbasova
The European Bank for Reconstruction and Development(EBRD) has approved a new four-year-strategy for Tajikistan in order to support private business, public utilities and regional cooperation in the country.
One of the EBRD's priority in the country within the new strategy for Tajikistan will be ensuring economic growth through supporting private business, in particular small and medium-sized enterprises, and helping improve the business environment.
The financial remittances provide for the economic growth of the country, while the weak fiscal system hampers the development of a viable private sector, according to the document.
The Bank will support the development of private business through the targeted investment, advisory services and skills training, as well as policy dialogue to improve the business environment, including specific support of women entrepreneurs, and regional diversification of the Bank’s activities.
The Bank will seek to further stabilize the banking sector and enhance access to finance and know-how for SMEs through a variety of instruments, including development of MFIs by supporting microfinance and providing local currency funds, as well as business advice.
The EBRD will also contribute to improving public utility services, as well as their operational and financial efficiency in the framework of the four year activity in the country.
In accordance with the draft strategy for Tajikistan, the EBRD reported that the country experiences chronic seasonal electricity shortages, which impose large economic losses.
Therefore. the Bank will work with public utilities and authorities across the municipal, power, and transport sectors to help build and rehabilitate infrastructure and promote to achieve sustainable improvements in provision of services within the four-year strategy.
Moreover, the EBRD will foster with regional infrastructure connectivity and integration into the wider regional economy of the country.
Across these main strategic orientations the Bank will aim at promoting climate resilience and gender equality.
To achieve all these objectives, there will be needed close consultation with other International Financial Institutions(IFIs), which are active in Tajikistan.
"The new strategy will stimulate investment and reform, particularly in the energy and financial sectors, and help connect Tajikistan more effectively to the wider region," said Philippe Le Houerou, EBRD Vice President for Policy and Partnerships.
The Bank expects to invest about $200 million in 2015 thanks to some high-profile projects of regional importance, including the modernization of Tajikistan’s electricity transmission infrastructure.
The EBRD increased investments to $75 million in Tajikistan in 2014.
The EBRD has invested over $460 million in various sectors of Tajikistan’s economy, since the beginning of its operations in the country in 1992.
Recently, the EBRD provided a $110 million loan to finance construction of the power converter station and related infrastructure in the country.
These investments are allocated as part of financing the high-voltage transmission line project Central Asia South Asia Electricity Transmission and Trade, known as CASA-1000, that will supply electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan.
Total estimated cost of the CASA-1000 electric power line project, which is scheduled to launch in 2018, is $997 million.
The overall CASA-1000 project involves a number of international financial institutions and donors, including the World Bank (WB), Islamic Development Bank (IDB), European Investment Bank (EIB), as well as the United States Aid (USAID).
Implementing CASA-1000 project on the territory of Tajikistan will be worth over $300 million, according to the Tajikistan Energy and Water resources Ministry.
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