VZCZCXRO9861
PP RUEHLN RUEHVK RUEHYG
DE RUEHDBU #0778/01 1501212
ZNR UUUUU ZZH
P R 301212Z MAY 07
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC PRIORITY 0329
INFO RUCNCIS/CIS COLLECTIVE
RUEHBUL/AMEMBASSY KABUL 2097
RUEHNE/AMEMBASSY NEW DELHI 2102
RUEHIL/AMEMBASSY ISLAMABAD 2129
RUEHPW/AMCONSUL PESHAWAR 0009
RUEHLH/AMCONSUL LAHORE 0004
RUEHKP/AMCONSUL KARACHI 0007
RUEAIIA/CIA WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEHDBU/AMEMBASSY DUSHANBE 2029

UNCLAS SECTION 01 OF 02 DUSHANBE 000778 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON ENRG EAID TI AF
SUBJECT: IN TAJIKISTAN, A LUMP OF COAL IS NOT SUCH A BAD THING 
 
REF: Dushanbe 637 
 
DUSHANBE 00000778  001.2 OF 002 
 
 
¶1. (SBU) SUMMARY:  Nothing would please the Tajik government 
more than big lumps of coal in their stockings this Christmas, 
preferably from a U.S.-financed mine that fuels a thermal power 
station.   At a May 29 roundtable meeting on "Integrated 
Development of Coal and Power Projects and Reconstruction of 
Thermal Power Plants for Coal Fuel" sponsored by the Tajik 
Ministry of Energy and Industry, investors, donors and the 
government signed a declaration to study Tajikistan's coal 
reserves, with an end goal of year-round electricity production 
for domestic use and export.  The United States agreed to 
consider reassigning Trade and Development Agency grant money 
already allocated to Tajikistan for a coal-related feasibility 
study, should the Ministry submit a sensible proposal that 
supports our regional energy goals.  END SUMMARY. 
 
¶2.  (SBU) At the day-long meeting, the Ministry had a focused 
agenda and concrete answers to donor questions about feasibility 
and goals.  After opening remarks by Minister of Energy Sherali 
Gulov, Deputy Prime Minister Asadullo Ghulomov included in his 
own comments specific references to a May 28 meeting with SCA 
Senior Advisor Bob Deutsch (septel), noting that Tajikistan was 
ready to comply with all international standards on power 
purchase agreements.  "We commit ourselves to upgrading Tajik 
law in those areas where we do not meet international norms." 
Deputy Minister of Energy Pulod Mukhiddinov outlined 
Tajikistan's coal potential, notably deposits at Fon Yaghnob, 
Nazar Aylok and Ziddi, and the possibility of converting 
gas-powered thermal stations in Dushanbe and Yavan to 
coal-fueled.  All noted that despite rich hydropower potential, 
coal-powered electricity would help meet the demand during 
Tajikistan's winter months, when most of the country sits in the 
dark, and help meet year-round export commitments. 
 
¶3.  (SBU) Prospective investors made presentations about their 
interest and experience in the coal sector.  Presenters included 
the U.S. firm AES, Russia's RAO UES, three Kazakh firms, (one 
having already invested $1 million in a Tajik coal field), a 
British consultant, and Chinese equipment manufacturers.  Among 
the conference's 80 participants were local representatives from 
the major international financial institutions -- World Bank, 
Asian Development Bank, European Bank for Reconstruction and 
Development, International Finance Corporation, Islamic 
Development Bank, Eurasian Development Bank -- plus 
Washington-based World Bank Energy advisor Raghu Sharma. 
 
¶4.  (SBU) At the end of the meeting, which finished a remarkable 
five hours ahead of schedule,  Sharma and Ghulomov facilitated a 
discussion of the next steps to developing the coal sector and 
finalized a "conclusions" declaration, which outlined 
participants' intent and narrowed the focus to the Fon Yaghnob 
deposit and possible rehabilitation of the Dushanbe and Yavan 
stations.  The declaration included commitments to uphold 
environmental and safety standards and create a "shell company" 
based on an Indian model that would obtain the necessary 
clearance and conduct the feasibility studies, and then be 
transferred to the private investor selected to develop the 
project. 
 
¶5.  (SBU) Ghulomov repeated a previous appeal to the U.S. 
government to reallocate TDA grant money to a coal feasibility 
study; based on Deutsch's earlier meetings with Ghulomov, 
Pol/Econ chief agreed that this would be possible if there were 
a concrete proposal that supported U.S. regional electricity 
goals, including developing an electricity source that could 
provide Afghanistan with year-round power. 
 
¶6. (SBU) In a likely effort to demonstrate strong government 
commitment to the project, the Tajiks trotted out other economic 
heavy hitters, including the chairman of the Tajik Aluminum 
Company, the head of Tajik State Savings Bank, the deputy of 
Orien Bank (Tajikistan's largest commercial financial 
institution), the Minister of Economic Development, the 
Presidential Advisor on Energy (and former Minister of Energy), 
and most of the Ministry of Energy and Industry. 
 
¶7.  (SBU) Comment: The concrete goals and presentations of this 
meeting contrasted sharply with the April roundtable for 
consultants on a regional electricity trade project (reftel) 
where Tajik officials remained in the realm of the theoretical, 
making the pitch for any and all generation projects.  Ghulomov, 
who missed the last meeting due to medical treatment, was active 
 
DUSHANBE 00000778  002.2 OF 002 
 
 
and engaged in the discussion, and seemed to have taken 
Deutsch's comments about international standard agreements to 
heart.  He assured investors and donors that Tajikistan was 
ready to move forward quickly to ensure that thermal-generated 
electricity could be part of the regional electricity trade.  We 
hope he means it.  End Comment. 
JACOBSON