VZCZCXRO0212
RR RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHDBU #0474/01 1051026
ZNR UUUUU ZZH
R 151026Z APR 09
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0231
INFO RUEHDBU/AMEMBASSY DUSHANBE 0437
RUCNCIS/CIS COLLECTIVE
RUEHBUL/AMEMBASSY KABUL 0079

UNCLAS SECTION 01 OF 02 DUSHANBE 000474 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN 
ASHGABAT PASS BOUCHER 
 
E.O. 12958: N/A 
TAGS: ENRG ECON PREL PGOV TI
SUBJECT: TAJIKISTAN: UPDATE ON POWER PROJECTS 
 
DUSHANBE 00000474  001.2 OF 002 
 
 
¶1. (U) Summary: The power situation in Tajikistan has eased 
since the winter crunch.  Water levels at the Nurek hydropower 
station remain low, although this spring's abundant rains may 
help.  The fourth and final generator of Russian-built 
Sangtuda-1 is expected to go online in mid-May.  Iranian-built 
Sangtuda-2 is not expected to be completed until the 2010 or 
¶2011.  The government's priority remains the enormous Roghun 
project, although no firm schedule for completion is in sight. 
There are several plans to build new transmission plans to link 
Tajikistan with regional energy partners.  The largest of these 
may be endangered by reduced donor funding due to the financial 
crisis.  End summary. 
 
Nurek 
----- 
 
¶2. (U) The Nurek hydropower station continues to be the mainstay 
of Tajikistan's domestic energy production, accounting for 
three-quarters of the country's 4,700 Megawatt (MW) capacity. 
Due to last year's drought, for the first time in Nurek's 
37-year history its reservoir did not fill to capacity, which 
meant less energy for the lean winter months.  While this 
spring's rainy weather has been a good omen for both agriculture 
and energy, the Nurek reservoir has so far risen only 1.2 meters 
over its low point and is almost 53 meters below full.  The 
major project this year for Nurek is a $54.77 million upgrade, 
financed by the Asian Development Bank, of the station's aging 
electrical switch yard, which is located on subsiding ground. 
 
Sangtuda-1 
---------- 
 
¶3. (U) The Sangtuda-1 hydropower station, financed and built by 
Russian energy giant RAO UES, is scheduled for completion on May 
15, when Presidents Rahmon and Medvedev will attend an official 
opening ceremony.  Already, three of the station's four 
generators are operating.  Once the fourth is completed, 
Sangtuda-1 is expected to generate 670 MW of electricity.  Last 
winter, the partially-completed Sangtuda-1 was able to pick up 
some of the slack from underperforming Nurek.  Russia retains a 
75% share in the power station. 
 
¶4. (U) On March 27, Sangtuda-1 became the subject of some 
controversy when workers declared a one-day strike to demand 
four months of back wages.  Managers at Sangtuda said they could 
not pay the wages because Tajikistan's state-held power company 
Barqi Tojik had yet to pay a $10 million debt to the power 
station.  A week later Barqi Tojik announced that it was paying 
2 million somoni ($520,000) to Sangtuda, part of which was to be 
used to pay worker salaries. 
 
Sangtuda-2 
---------- 
 
¶5. (U) The Sangtuda-2 hydropower station, located 25 kilometers 
from Sangtuda-1, is being built by the Iranian firm Sangob, with 
major financing from the Iranian government.  It was initially 
slated to be online by 2011, but Tajik authorities have asked 
the Iranians to complete it a year earlier.  Construction on the 
station, which will contain two generators, began in February 
¶2006.  The estimated cost of constructing Sangtuda-2 is $220 
million, including a $180 million preferential loan from Iran 
(ten years at 5% annual interest) and $40 million in Tajik 
government financing.  As of March 2009 about $90 million had 
been spent on construction. 
 
Roghun 
------ 
 
¶6. (U) Tajikistan's largest energy project under construction 
remains the Roghun hydropower station, situated upstream from 
Nurek, which is expected to generate 3,600 MW, almost doubling 
the country's current capacity.  Roghun is under the supervision 
of the Presidential Administration rather than the Ministry of 
Energy and Industry.  The project was launched in the 1970s, but 
lay idle for many years due to lack of financing and civil 
strife.  Construction restarted last year, and the government 
expects to begin raising the dam in late 2009.  It has earmarked 
$150 million for the project this year.  The first two 
generating units of the station are supposed to begin operations 
in three or four years, theoretically providing revenue to pay 
for further construction of the dam. 
 
¶7. (U) Uzbekistan has strongly opposed construction of Roghun, 
saying it will reduce downstream water supplies; Tajikistan 
presses ahead with the project regardless.  The World Bank is 
funding a feasibility study of Roghun which will take into 
account the water needs of downstream countries.  Recently the 
 
DUSHANBE 00000474  002.2 OF 002 
 
 
UNDP representative in Dushanbe, and the EU's Special 
Representative for Central Asia have called for more attention 
to small and medium hydropower projects, saying Roghun is too 
expensive, too large, and too controversial to be built any time 
soon, and Tajikistan needs more practical ways to escape its 
chronic energy crisis. 
 
Transmission Lines 
------------------ 
 
¶8. (U) Key to Tajikistan's energy future is not just increasing 
its generation capacity, but augmenting its ability to offset 
seasonal energy imbalances by trading power with neighboring 
countries.  In November 2007 the Central Asia/South Asia 
Regional Electricity Market (CASAREM) agreement was signed to 
implement a $500 million power transmission line connecting 
Central Asia with South Asia.  In its first stage, the so-called 
CASA-1000 project would transfer around 1,300 MW of electricity 
from Tajikistan and Kyrgyzstan to Pakistan and Afghanistan. 
CASAREM, the secretariat of which is based in Kabul, was 
supposed to receive 40% of its funding from the World Bank, 40% 
from the Asian Development Bank (ADB), and 20% from the Islamic 
Development Bank (IDB).  In February of 2009, however, the ADB 
notified the Tajik Government that it was suspending its 
contribution to the project due to a decline in available 
funding brought on by the world financial crisis.  The World 
Bank and the IDB have not yet revealed their plans.  The ADB 
says it is ready to resume negotiations on CASA-1000, provided 
that the Tajik government is prepared to discuss prioritizing 
the project with the other partners -- Afghanistan, Pakistan, 
and Kyrgyzstan. 
 
¶9. (U) There are other, smaller transmission projects in the 
works.  In August 2008, under the Power Purchase Agreement 
signed between Tajikistan and Afghanistan, electricity will be 
transmitted from Sangtuda-1 to Pul-e Khumri in Afghanistan, via 
a 220 kV line.  The ADB is funding construction of this project 
with a $50 million loan.  Construction of the 120-kilometer line 
is supposed to start this autumn and finish in spring 2010.  In 
addition, the Iranian government is funding a feasibility study 
for a 500 kV line from Sangtuda to Kunduz, Mazar-i-Sharif, 
Herat, and Meshhed. 
 
¶10. (SBU) Comment: Tajikistan is still a considerable distance 
from solving its chronic seasonal energy shortages.  The 
government remains fixated on big-ticket construction programs, 
particularly the extravagant Roghun project.  In fact, however, 
Tajikistan may be better served by focusing on expanding its 
regional energy trading.  In that way, it can use its already 
appreciable summer power surplus to trade for much needed 
electricity in the winter.  End comment. 
JACOBSON