VZCZCXRO2814
RR RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHDBU #0712/01 1590857
ZNR UUUUU ZZH
R 080857Z JUN 09
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0405
INFO RUCNCIS/CIS COLLECTIVE
RUEHDBU/AMEMBASSY DUSHANBE 0892
RUEHBUL/AMEMBASSY KABUL 0144

UNCLAS SECTION 01 OF 03 DUSHANBE 000712 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: ENRG PGOV ECON ETRD TI
SUBJECT: ENERGY SAVING LIGHT BULBS, NOT SUCH A BRIGHT IDEA 
 
DUSHANBE 00000712  001.2 OF 003 
 
 
¶1. (SBU) Summary.  In April President Rahmon signed a decree 
obligating all residential and commercial entities in Tajikistan 
to begin switching to energy-saving lightbulbs by May 1.  The 
President said the change from incandescent lighting would save 
millions of kilowatt-hours of electricity annually.  Energy 
experts find the claims highly exaggerated.  New Chinese-made 
energy-saving bulbs, mountains of which are for sale in 
Dushanbe's markets, cost between $1.50 and $4.50, compared to 
$0.25 to $0.50 for incandescent bulbs.  One of the biggest 
importers of these new bulbs is rumored to a Presidential 
daughter.  According to Embassy sources, she imports truckloads 
of bulbs and other goods from China, circumventing customs 
officials at the border.  The switch to energy-savings bulbs may 
be another example of an apparently progressive regulation in 
fact designed to benefit the President's inner circle.  End 
summary. 
 
 
 
President Commands: Let There Be (Energy-Saving) Light 
 
--------------------------------------------- --------- 
 
 
 
¶2. (U) On April 24, 2009 President Rahmon signed decree #653 "on 
additional measures on economical use of energy and energy 
saving," which dictates that from May 1, 2009, all residences 
and commercial entities in Tajikistan must begin using energy 
saving light bulbs.  The decree stipulates that by the end of 
2009 all incandescent bulbs must be changed to the new energy 
saving models.  The new bulbs, at $1.50-4.50 versus $0.25-0.50 
for incandescent bulbs are a significant cost to Tajik 
households, whose incomes average less than $200 per month. The 
government announced that it would provide free lightbulbs to 
241,000 poor families by October to help them fulfill the 
decree.  (Note: According to the World Bank, 53% of Tajikistan's 
population of roughly 7 million lives under the poverty level. 
End note.)  The President also ordered that two new plants be 
set up by 2011 to manufacture energy-saving bulbs. 
 
 
 
Tajikistan's Energy Woes 
 
------------------------ 
 
 
 
¶3. (U) The President has said the introduction of the new bulbs 
would save millions of kilowatt-hours of electricity per year. 
Officials at the state electrical company Barki Tojik have gone 
further, saying the measures will save as much as 3 billion kWh. 
 While this claim is wildly overblown, the need for better 
energy policy and improved efficiency in Tajikistan is 
indisputable.  Tajikistan has the potential to produce more than 
300 billion kilowatt-hours (kWh) of electricity per year, mainly 
through hydropower, but currently produces only 16.5 billion kWh 
annually -- i.e., only 5.5% of its potential.  The biggest 
energy problem the country faces is the cyclical nature of its 
hydropower generation.  During the winter months low water 
levels mean that far less power can be generated.  During Soviet 
times the winter deficit was supplemented with power from 
neighboring regions.  Since independence, and as a result of 
poor regional relations, most regions of Tajikistan face severe 
rationing, receiving only an hour or two of electricity per day 
in the winter. 
 
 
 
¶4. (U) Energy wastage and other inefficiencies are significant 
problems in Tajikistan.  Most of the country's electrical grid 
was built a half-century ago, when efficiency was a lower 
priority, and there have been few renovations since.  In 
addition to technical losses, corruption and outright theft at 
all levels are significant problems.  Barki Tojik estimates that 
the country loses some 30% of its annual output due to various 
problems.  International financial institutions and energy 
experts argue that wastage is exacerbated by pricing policies 
that do not make consumers value energy.  The cost of 
electricity in Tajikistan, averaging about 1.8 cents per kWh, is 
among the cheapest in the world and is well under production 
costs.  At the recommendation of the World Bank, the Tajik 
Government plans to increase average tariffs to 2.5 cents per 
kWh by 2010, still very low compared to other countries in the 
region and around the globe. 
 
 
 
 
DUSHANBE 00000712  002.2 OF 003 
 
 
¶5. (SBU) Even if residential rates are raised, it will not have 
much effect on overall energy consumption and availability until 
authorities tackle industrial use.  Tajikistan's largest 
industrial energy consumer, the TALCO aluminum plant, uses as 
much as 60% of the country's total production, but pays only 
1.09 cents per kWh at today's exchange rates.  Since most of 
TALCO's profits go to off-shore companies rumored to have close 
connections to President Rahmon, it is unclear if the government 
will find the resolve to raise energy rates for TALCO. 
 
 
 
The Darker Side of the President's Light Policy 
 
--------------------------------------------- -- 
 
 
 
¶6. (SBU) According to several Embassy contacts in the business 
community, the largest supplier of energy saving lightbulbs to 
Tajikistan is affiliated with one of the President's daughters, 
Tahmina Emomali.  According to one contact, a particularly large 
shipment of lightbulbs from China reached Tajikistan right 
around the time of the President's decree.  An Embassy customs 
service contact refused to comment on the shipment, only smiling 
and saying it was too provocative to ask such questions.  But 
there is other anecdotal evidence from customs officials that 
Emomali regularly brings shipments from China to Tajikistan, 
which are hastened through the border crossing without being 
examined by customs agents or assessed import tariffs.  Rahmon 
has directed the Tajik customs service to report on the number 
of energy-saving lightbulbs imported into Tajikistan -- a move, 
some suggest, designed to keep tabs on his daughter's 
competition. 
 
 
 
¶7. (U) The sudden changeover from incandescent bulbs has 
instantly created a new multi-million dollar market in 
Tajikistan.  Chinese-made energy-saving bulbs cost between $1.50 
and $4.50, depending on the model and manufacturer.  With over 
one million private energy consumers and over 30,000 industrial 
consumers, the Embassy estimates that the total market for the 
new bulbs is as high as $30 million.  With prices averaging 
between $0.25 and $0.50 per bulb, incandescent bulbs earned much 
less.  According to media reports, the Tajik government received 
a proposal from the Chinese firm Opple to build two 
energy-saving lightbulb plants in Tajikistan.  The company 
claims that it already exports Chinese-made bulbs to 80 
countries.  Opple officials reportedly have examined two 
potential locations, including a former bulb factory in the 
northern city of Isfara and a site in the President's hometown 
of Dangara.  No further actions have been taken. 
 
 
 
Safety Concerns 
 
--------------- 
 
 
 
¶8. (U) Many Tajiks are concerned that Chinese-made energy saving 
light bulbs pose a health risk because they contain mercury. 
Government agencies, including the inspection agency 
TojikGosstandart, say the bulbs pose no risk, because the level 
of mercury is too low to have any effect on the human body.  But 
an independent researcher in the northern city of Chkalovsk, 
Viktor Lyadskiy, said that because the Chinese bulbs have a very 
short lifespan, even small amounts of mercury can accumulate to 
form toxic levels.  Unless the mercury is stored deep 
underground, it may indeed pose a threat to humans.  Lyadskiy 
has accused Tajik authorities of failing to check the quality of 
imported bulbs and of neglecting important health and safety 
issues. 
 
 
 
¶9. (SBU) Comment.  While few argue against the importance of 
energy conservation, the President's sudden, sweeping war on 
incandescence have led many to suspect an ulterior motive.  It 
is difficult to distinguish facts from rumors in the shadowy 
world of Tajik business, but the contention that the President's 
daughter benefits from his recent decree is entirely believable. 
 Promoting energy-saving technology is a good idea.  If the 
government is serious about relieving some of Tajikistan's 
perennial energy problems, however, it will work to create a 
more rational pricing policy for residential consumers and TALCO 
alike, while promoting small-scale alternative energy production 
 
DUSHANBE 00000712  003.2 OF 003 
 
 
that would lessen the load on the state's hydropower resources. 
Otherwise the energy-saving bulb decree looks like just another 
way to line the pockets of the President's inner circle at the 
expense of financially stressed Tajik hosueholds. 
 
End comment. 
JACOBSON