VZCZCXRO1595
RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #1370/01 3081144
ZNR UUUUU ZZH
R 031144Z NOV 08
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 1105
INFO RUCNCIS/CIS COLLECTIVE
RUEHBUL/AMEMBASSY KABUL 0282

UNCLAS SECTION 01 OF 02 DUSHANBE 001370 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN 
 
E.O. 12958:  N/A 
TAGS: PREL PGOV PHUM ECON EAID TI
 
SUBJECT: TAJIKISTAN: ANNUAL ENERGY CRISIS COULD BE EVEN MORE 
DISASTROUS THAN LAST WINTER 
 
¶1. (SBU) Summary.  On November 1, Tajikistan began receiving energy 
from Turkmenistan as part of an agreement to import 1.2 billion 
kilowatt-hours this winter.  A separate arrangement to import 600 
million kWh from Uzbekistan is still some distance from being 
realized.  The Turkmenistan deal, which had been held up several 
times this fall because of Uzbekistan's reluctance to allow the 
power to be transported along its electricity grid, will be 
essential to helping Tajikistan get through the winter.  But it will 
not be enough.  With record-low water levels at the Nurek 
Hydroelectric Station, which generates 75% of Tajikistan's domestic 
power, some worry that the country may be facing a repeat of last 
winter's energy crisis.  Rising fuel costs will exacerbate the 
problems.  End summary. 
 
Turkmenistan Has the Electricity but Uzbekistan Wields the Power 
 
¶2. (U) The Tajik media reported that on November 1, Tajikistan began 
receiving much-needed supplies of power from Turkmenistan. 
According to an agreement signed between the two countries in 2007, 
Ashgabat will provide Tajikistan with 1.2 billion kilowatt-hours 
(kWh) of electricity each winter until 2012, at a cost of three 
cents per kWh.  Tajikistan's state electricity company Barki Tojik 
had been negotiating with Ashgabat since August to start the flow of 
power this year, but implementation was delayed several times 
because of difficulties securing permission to transport the 
electricity through Uzbekistan's transmission lines.  Even after 
Presidents Rahmon and Karimov agreed in principle in mid-October to 
start the flow, formal implementation of the agreement was still 
held up several times.  The power was finally turned on only after 
Sharif Samiev, the head of Tajikistan's state electricity company 
Barki Tojik, made an October 30-31 visit to Ashgabat and Tashkent. 
Tajikistan has agreed to pay Uzbekistan USD $0.003 per kWh in 
transit fees. 
 
¶3. (SBU) In addition to purchasing power from Turkmenistan, 
Tajikistan also has an agreement with Uzbekistan to trade energy 
annually: Tajikistan provides Uzbekistan with 900 million kWh of 
hydro-generated power in the summers in exchange for 600 million kWh 
from Uzbekistan's natural gas-fired plants during the critical 
winter months.  Last year, a 500 kV transmission line between the 
two countries was repaired, and the exchange worked as negotiated. 
However, the terms of the agreement must be reapproved each year by 
both countries.  In a meeting on October 30, Tajikistan's First 
Deputy Minister of Energy and Industry, Pulod Muhiddinov, told us 
that there are indications from Tashkent that Uzbekistan may not 
provide the full 600 million kWh this winter.  He said the status of 
the Uzbek power will become clearer after an inter-ministerial 
meeting scheduled for late November in Tashkent.  Whatever power 
Uzbekistan ultimately provides, however, will not begin flowing to 
Tajikistan until the new year. 
 
Outlook Worrisome for Domestic Power this Winter 
 
¶4. (SBU) The Turkmenistan agreement represents an essential step in 
helping Tajikistan get through the winter.  However, the country's 
most critical energy component is the Nurek Hydroelectric Station, 
which is responsible for 75 percent of Tajikistan's 4,000 MW 
production capacity.  The outlook this year is not good.  According 
to Muhiddinov, partly as a result of this summer's drought, the 
water level in Nurek's reservoir is the lowest it has been in the 
dam's 36-year history.  For the first time ever, the reservoir was 
Qnot filled to its 910-meter capacity.  As a result of the eight 
meters by which it fell short, Nurek will produce some 850 million 
kWh less than it did last winter. 
 
¶5. (SBU) To make matters worse, according to recent news accounts, 
Nurek's water level is currently just 31 meters above the "dead 
point," below which the plant can no longer generate power.  There 
are concerns that due to its low starting point and 
lower-than-average inflow from the Vakhsh River, Nurek may go 
off-line at some point during the late winter.  The Vakhsh is 
currently adding some 10-15 centimeters a day to the reservoir, but 
that flow may go down to as low as 0-5 centimeters, as it did last 
winter.  With the dam consuming between 20 to 50 centimeters a day, 
without further reducing production Nurek could lose the ability to 
generate power as early as February Q just when the country is 
experiencing its lowest temperatures and its greatest need for 
heating. 
 
¶6. (SBU) Muhiddinov told us that the Nurek losses will be offset 
somewhat by power from the Sangtuda-1 Hydroelectric Station, which 
has just come on-line this year.  Two of the station's four turbines 
are now operating, with the third scheduled to begin service in 
November and the fourth in February or March of next year.  (Note: 
earlier press releases announced that all four turbines would be 
on-line by December.  End note.)  Sangtuda-1 should be able to 
provide 150-160 million kWh per month over the winter using three 
 
DUSHANBE 00001370  002 OF 002 
 
 
turbines, which should just about make up for the Nurek losses. 
 
¶7. (U) With inadequate hydroelectric capacity, a large share of 
Tajikistan's population will rely on coal and liquefied petroleum 
gas (LPG) for heating.  Over the first nine months of 2008, 
Uzbekistan exported 650 million cubic meters of natural gas to 
Tajikistan, at a cost of US $145 per 1,000 cubic meters.  As of 
September, Tajikistan's debt to Uzbekistan for the gas was US $6 
million, half of it owed by Barki Tojik.  As a result of the debt, 
Uzbekistan has already cut natural gas supplies to Tajikistan by 
50%, and there are concerns that without repayment it may shut off 
the flow entirely, as it has in the past.  Finding the money to pay 
back the debt is hampered, Tajik officials say, by ineffective 
metering and widespread illegal connections to gas and electricity 
lines that result in losses of 25 to 30% of Barki Tojik's potential 
revenue. 
 
Where Does This Leave Jamshed the Plumber? 
 
¶8. (SBU) According to Samiev, the agreement with Turkmenistan will 
allow residents to receive an additional two hours of power a day. 
Without it, electricity supplies in most parts of the country this 
winter would have been reduced to only four to six hours a day. 
Most here believe, however, that in light of Nurek's low expected 
production this year, these figures are optimistic.  They express 
similar doubt about promises to supply Tajikistan's five chief 
cities Q the capital, Dushanbe, along with Khujand, Kurgan-tube, 
Tursunzade, and Kulyob Q with round-the-clock power.  Samiev himself 
said in a recent interview, "We have the president's order that 
electricity rationing should not be applied to Dushanbe.  That is 
why there is no power rationing in the capital so far.  However, 
this does not mean that there will be light everywhere."  (Note: 
Indeed, some Embassy employees report that they are already 
experiencing power outages in the capital.  End note.) 
 
¶9. (SBU) While Samiev and other Tajik officials say that the 
imported power will be provided first and foremost to Tajik 
residential consumers, few here have any illusions about where the 
lion's share of the electricity will actually go.  Tajikistan's sole 
major industry and its chief foreign revenue earner, the Talco 
aluminum plant in Tursunzade, accounts for some 40 to 60% of the 
country's entire power consumption, or nearly 600 million kWh per 
month.  Authorities have been loathe to decrease power to the plant 
in the winter; President Rahmon and his family members are 
reportedly direct beneficiaries of the plant's revenues.  With world 
aluminum prices off by over a third from their summer high, however, 
Talco's revenues are likely to decline significantly this year, 
which will in turn affect the country's ability to fund future power 
imports.  Experts say, however, that even if there was the political 
will to shut the plant down in order to free up energy for 
residents, the resulting damage to the plant could ultimately be 
more costly than keeping it on-line through the winter. 
 
¶10. (U) For the average resident, increasing fuel costs will make it 
even more difficult to get through the winter.  The price of gas has 
increased by 25% since last year (from US $0.79 to US $1.00 per 
liter), and diesel, which is used to power generators, is even 
higher, at US $1.12 per liter.  Beyond this, Barki Tojik has said it 
will raise electricity prices by 40% next year.  Despite these grim 
numbers, vendors are importing large numbers of generators, and 
Dushanbe's Sultoni Kabir market now offers a wide variety of LPG, 
QDushanbe's Sultoni Kabir market now offers a wide variety of LPG, 
kerosene, and electrical heating systems, at prices ranging from US 
$80 to US $2,000. 
 
¶11. (SBU) Comment: Tajikistan's chronic energy problems will mean 
yet another difficult winter for its residents.  The country remains 
dependent on Uzbekistan for support, but the poor relations between 
the two countries continue to make it difficult for Tajikistan to 
secure the energy it needs.  There are some bright spots this year: 
Sangtuda-1 is now online, and much of the diplomatic groundwork for 
importing power from Turkmenistan and Uzbekistan has already been 
laid.  But it is still unclear whether these factors will offset the 
challenges: Nurek's water level is at a historic low, aluminum 
prices are plummeting, and fuel costs continue to rise 
precipitously.  In the long term, energy stability for Tajikistan 
will not come until the country is better integrated into regional 
energy networks.  For now, however, the biggest hope is that last 
year's frigid winter was truly a once-in-a-half-century occurrence. 
End comment.