VZCZCXRO1437
RR RUEHLN RUEHPOD RUEHSK RUEHVK RUEHYG
DE RUEHDBU #1330/01 3311031
ZNR UUUUU ZZH
R 271031Z NOV 09
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0942
INFO RUCNCIS/CIS COLLECTIVE
RUEHBUL/AMEMBASSY KABUL 0315
RUEHIL/AMEMBASSY ISLAMABAD 0205
RUEHNE/AMEMBASSY NEW DELHI 0159
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RUEHAST/AMCONSUL ALMATY 0030
RUEHDBU/AMEMBASSY DUSHANBE 2041

UNCLAS SECTION 01 OF 04 DUSHANBE 001330 
 
SIPDIS 
 
STATE FOR SCA/CEN, OES/PCI 
 
E.O. 12958: N/A 
TAGS: ENRG SENV ECON ZK TI
SUBJECT: SECOND ANNUAL RENEWABLE ENERGY CONFERENCE: SHOWING THE WAY, 
STILL LOOKING FOR THE WILL 
 
DUSHANBE 00001330  001.2 OF 004 
 
 
¶1. SUMMARY.  Dushanbe hosted the Second Annual Renewable Energy 
Conference on November 9, sponsored by the Carnegie Endowment 
for International Peace, the Regional Environmental Center for 
Central Asia (CAREC), and the Renewable Energy Association of 
Tajikistan (REAT).  Attendees came from all the Central Asian 
countries, Europe, Russia, and the United States.  Tajikistan's 
First Deputy Minister of Energy and the U.S. Ambassador to 
Tajikistan gave keynote speeches to open the conference.  Among 
the many points raised, the presenters noted the rich potential 
of renewable energy, citing a number of projects in solar, wind, 
and small hydropower.  They also pointed out the lack of 
financing, the fact that renewable energy is not yet 
commercially feasible, and that investors face an unclear legal 
environment fraught with risk.  Yet, with persistence and 
favorable policies, renewable energy could become cheaper than 
oil, gas, or coal over time.  Renewable energy could also 
stimulate economic development in rural communities, provide 
jobs, raise incomes, and alleviate poverty.  END SUMMARY. 
 
TAJIKISTAN RICH IN POTENTIAL BUT LACKS FINANCING 
 
¶2. Tajikistan's First Deputy Minister of Energy and Industry, 
the U.S. Ambassador to Tajikistan, and noted Central Asian 
scholar Dr. Martha Olcott gave keynote speeches opening the 
Second Annual Renewable Energy Conference on November 9.  (NOTE: 
On the eve of the conference, Dushanbe's electricity went out 
across the city for two hours.  It was not only a timely 
premonition of the importance of renewable energy to 
Tajikistan's future, but it was also a testament to the energy 
crisis that Tajikistan now faces at the onset of winter.  END 
NOTE.)  First Deputy Minister of Energy and Industry Asadullo 
Gulyamov said Tajikistan was blessed with considerable renewable 
energy potential, including small hydro power and wind energy in 
remote villages off the grid.  Tajikistan had an adequate legal 
and normative base to develop renewable energy, and 
international organizations and banks had already financed 
renewable energy projects.  Unfortunately, Tajikistan's ability 
to fund such projects was inadequate.  Because Tajikistan was in 
a constant state of need, and because the existing energy 
capacity was insufficient to meet the country's needs, 
Tajikistan was keenly interested in developing its renewable 
energy potential.  This conference would give all participants 
the opportunity to see the various paths forward. 
 
AMBASSADOR: DIVERSIFICATION IMPORTANT BUT NEED CLEAR RULES 
 
¶3. Ambassador Gross said renewable energy was very important in 
Central Asia, and President Obama had made renewable energy 
development a high priority.  He applauded Tajikistan for its 
work to develop renewable energy, but he noted that Tajikistan 
faced rationing part of the year because of the cyclical nature 
of its energy sources.  Diversifying its energy sources and 
capacity was very important for Tajikistan's future, and wind, 
solar, and small hydro power stations were all readily 
available.  A lack of clear rules for small energy producers was 
one roadblock to using more renewable energy, but he added that 
there was a draft law to promote renewable energy.  However, the 
general population still had very little understanding about 
Tajikistan's considerable renewable energy potential. 
 
IS RENEWABLE ENERGY FEASIBLE? 
 
¶4. Asian Development Bank (ADB) Country Director Makoto Ojiro 
said Tajikistan was one of the countries most severely affected 
by climate change, largely due to glacier melting.  In the long 
term, Tajikistan needs to adapt to reduced water flows and 
consequently less hydro power.  He cited a number of ADB 
projects, including the Nurek Dam and the transmission line 
project to enable the export of electricity to Afghanistan.  He 
noted that ADB's "Strategy 2020" aimed to provide reliable 
energy consistent with sustainable development, and this 
strategy gives high importance to all renewable energy sources 
in the context of climate change.  The ADB was planning to spend 
$50-80 million in ten countries, including Tajikistan, to 
address the impact of climate change. 
 
¶5. REAT President Umarkhon Madvaliev said Tajikistan was using 
only 5% of its solar and wind renewable energy potential of 527 
billion kilowatt hours (kWh) per year.  Unfortunately, there was 
a lack of financial resources to develop renewable energy, there 
 
DUSHANBE 00001330  002.2 OF 004 
 
 
was no regulatory legislation concerning its use, and there were 
not enough trained technicians in the field of renewable energy. 
 
¶6. Kyrgyzstan NGO "Akmena" Alexey Postnov said domestic 
consumption in Kyrgyzstan accounted for 48% of energy use, 
industry 28%, and agriculture 11%.  One could not talk about 
renewable energy in Kyrgyzstan without also discussing the 
problems of inadequate energy supply, constantly pending energy 
crisis, inefficient use of resources, and lack of profitability. 
 In addition, there was enormous loss of energy along 
transmission lines.  Kyrgyzstan's energy crisis had a political 
aspect: the lack of a specific mechanism to manage water 
resources that was acceptable to all parties.  The political 
barriers included inadequate information among users on the 
possibility of renewable energy, a lack of financing for such 
projects, and the need to improve the legislation regarding the 
use and production of renewable energy.  On the positive side, 
the private market is gradually developing, and both China and 
South Korea are currently negotiating possible investment. 
 
¶7. Kazakhstan's UNDP Wind Energy Development Consultant Gennady 
Doroshin said UNDP's wind energy project in Kazakhstan was 
currently generating 121 kilowatt-hours (kWh) per year and 
experiencing growth of up to 30% per year; by 2010 Kazakhstan is 
expected to generate more than 400 Gigawatt-hours of wind energy 
per year.  Over time, the cost of wind energy could begin to 
approach the cost of coal, and it would be much cheaper than 
nuclear power.  The Kazakhstani government fully backed this 
program and there was good investment potential.  Doroshin 
helped the UNDP develop Kazakhstan's first wind atlas, which 
maps where winds were strongest, helping potential investors 
identify good locations for wind stations.  By 2024, Kazakhstan 
planned to generate 5% of its total energy from wind (it 
currently stands at 0.028%).  In spite of a recent law 
supporting development of renewable energy, he cited a number of 
remaining barriers, such as the lack of adequate juridical 
structures to support and stimulate the development of renewable 
energy and attract investment, and the high costs of renewable 
energy projects. 
 
¶8. Kyrgyzstan State Technical University Professor Ruslan 
Botpaev presented some projects his university had developed, 
including solar panels for water heating and space heating in 
apartments.  Solar panel heating was too expensive for the 
marketplace at the present time and could not be used when cloud 
cover blocked the sun, often the case in winter.  The potential 
market was huge, however, and with adequate investment and use 
over time, the cost of solar energy could become cheaper than 
natural gas. 
 
¶9. Germany's Gesellschaft fuer Technische Zusammenarbeit (GTZ) 
Energy Specialist Felix Zeiske said GTZ was using local 
materials (straw, fiber, lime, clay, etc.) to make thermal 
insulation for villages, and is double-glazing windows and 
sealing doors and windows.  GTZ hoped this would help reduce the 
excessive use of wood during winter, thereby reducing forest 
degradation in the countryside.  GTZ was providing micro 
financing up to $500 to buy and install insulation, and it 
expects a savings of 40-60% fuel use per house during winter as 
a result.  GTZ's goal is to insulate 500 homes in the Pamir 
Mountains by 2010. 
 
¶10. UNDP Consultant Zoran Morvich said the regulatory and 
financial framework for small hydro plants was underdeveloped in 
Tajikistan.  At least one million people in rural areas had 
little or no electricity year round, and this is especially 
difficult during winter.  Seventy-three percent of the 
population consumed only 8.5% of the country's total 
electricity.  Some small hydro plants existed but they were off 
the grid and only supplied households.  Some communities 
operated 100 kilowatt to 30 Megawatt stations, but they were 
also off-grid and operated only in the winter.  The UNDP sought 
to support the development of renewable energy resources 
(primarily small hydro and solar) to reduce poverty and promote 
economic development, with a focus on rural communities.  Its 
strategy was to help establish the proper political framework to 
promote the development of community-based small hydro and 
energy efficient projects; secure financing for renewable energy 
and energy efficient development, using local manufacturers and 
operators; and strengthen the capacity to monitor how renewable 
 
DUSHANBE 00001330  003.2 OF 004 
 
 
energy projects help reduce poverty.  The eventual goal was a 
50% reduction in poverty. 
 
LEGAL FRAMEWORK FOR RENEWABLE ENERGY 
 
¶11. Tajikistan's Committee of Communication and Investment 
Deputy Director Shodi Shabdolov acknowledged that there was a 
lack of legislation on renewable energy in Tajikistan. 
Parliament, however, was working actively on a draft law to 
stimulate the development of renewable energy.  Tajikistan faced 
two pressing problems: its forests were rapidly shrinking 
because villagers used wood in the winter and had no readily 
available alternative source of fuel; and the Pamir glaciers are 
shrinking, inevitably affecting life in all of Central Asia. 
This would force people eventually to leave Central Asia, which 
would increasingly become a vast empty desert.  This consequence 
was not only the result of the desiccation of the Aral Sea, but 
also of climate change.  Shabdolov said Uzbekistan announced 
that it would cut off all electricity to Tajikistan beginning in 
December, not even letting electricity from Turkmenistan transit 
Uzbekistan.  Existing energy resources were very limited, and 
the people would not wait for the government to pass laws to 
help develop renewable energy.  He did not elaborate on the 
consequences, but just left the pending threat hang in the air 
for conference members to ponder. 
 
¶12. Kazakhstan UNDP Consultant Gennady Doroshin said renewable 
energy currently was uncompetitive in the marketplace because of 
high investment costs and high risks.  Without adequate legal 
support, there was no incentive to invest.  He cited a number of 
conditions necessary to promote renewable energy, including a 
state investment subsidy, tax preferences, a favorable tariff 
rate that allows producers to sell to the grid, certification 
for those permitted to sell renewable energy, a requirement that 
the state grid purchase renewable energy, and stipulations that 
a certain percentage of power companies' generation must be 
renewable.  He noted that, because of ongoing concern about 
corruption, the government of Kazakhstan was still working out 
this concept.  Currently, Kazakhstan lost a tremendous amount of 
electricity in transmission.  Existing problems for renewable 
energy development included a lack of transparency in the 
regulations and consequent high risk for investors during the 
period of project development, bureaucratic barriers, conflict 
between users and monopolistic regulators, and the demand for 
renewable energy projects to conform to existing legislation 
without changes. 
 
DISCUSSION PERIOD: NEED FOR ADEQUATE LEGISLATION 
 
¶13. In the ensuing discussion period, one observer noted that if 
there was adequate legislation but no implementing act to 
empower the law, a law would remain just an empty declaration. 
Another added that the lack of viable renewable energy 
alternatives in rural areas was why villagers were cutting wood 
for winter, resulting in a massive stripping of forests, huge 
ecological degradation, and a major loss for the nation.  Yet 
another said renewable energy was too expensive to develop 
without support, so if there were no laws that provided 
favorable policies to investors, there would be no renewable 
energy and -- noting the recent blackout -- there would continue 
to be a huge electricity deficit in Tajikistan. 
 
AFGHANISTAN STRESSED NEED FOR RENEWABLE ENERGY PROJECTS 
 
¶14. Senior Advisor to the President of Afghanistan for Mines and 
Energy Rahman Ashraf gave the most interesting presentation of 
the conference, stating that for several years Afghanistan was 
ravaged by war and only since 2001 were the people united enough 
to build the country and provide for its energy needs.  Since 
2002, the government had worked with local communities to build 
small hydro power, solar energy, and wind generating stations. 
Only 10-15% of the population had access to electricity, one of 
the lowest rates in the world, and only 3% of the population was 
connected to the electric grid, mostly in large cities.  Most of 
the existing power stations were more than 40 years old. 
Eighty-five percent of the power generated is from "biomass" 
(e.g., wood), and the demand was expected to grow exponentially. 
 Ashraf said an electricity transmission line from Tajikistan 
should be completed in 2010, but because it was hydro-generated 
power would only be available seven months out of the year. 
 
DUSHANBE 00001330  004.2 OF 004 
 
 
There would be no electricity transmitted during the winter 
months. 
 
¶15. Ashraf noted that many small diesel-powered generators were 
initially sent to rural villages, but they could only provide 
limited service, they needed repair or replacement, and the 
local population could not afford to buy the fuel to run them. 
As a result, most of these generators were now not in operation. 
 Renewable energy, such as small hydro power, is a much more 
feasible solution, and since 2003, provincial reconstruction 
teams (with USAID funding) had installed 135 micro hydro power 
stations at a cost of $3500 per village.  These stations could 
be a major energy source for Afghanistan.  In addition, solar 
heating could also be an important source of energy, and the 
National Solidarity Program had plans to install solar powered 
lighting in 100 villages.  Wind and geothermal power also 
presented great opportunities for development. 
 
¶16. Ashraf argued that renewable energy could help stimulate 
regional economic development in rural areas, but villages 
needed access to financing.  He claimed that one kilowatt of 
electricity in villages could generate up to $1.5 in GDP.  Such 
projects helped create jobs and increase incomes in the medium- 
to long-term.  He insisted that giving jobs to former Taleban 
and their families was the best way to bring peace to 
Afghanistan. 
QUAST