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Soaring Roghun Dam Budget Causes Sweat for Authorities in Tajikistan

Swift progress on Tajikistan's Roghun hydroelectric dam construction, yet soaring expenses cast doubt as government faces challenge in securing needed funds for completion.

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Rapid advancements in Tajikistan's Roghun hydroelectric dam construction are underway, however,...
Rapid advancements in Tajikistan's Roghun hydroelectric dam construction are underway, however, mounting costs raise concerns as the government struggles to secure the necessary funds to complete the project.

Soaring Roghun Dam Budget Causes Sweat for Authorities in Tajikistan

The mammoth Roghun hydropower dam project in Tajikistan is charging ahead, yet expenses are escalating at an alarming rate, making it a struggle for the government to find the necessary funds to bring the project to completion.

In the face of this, Dushanbe is confronted with calls from environmental watchdogs, urging international development lenders to pause funding for the project until a fresh assessment is conducted.

Finance Minister Faiziddin Kahhorzoda revealed in a press conference on February 16 that the government shelled out a striking 5.2 billion somoni ($475 million) on Roghun construction work in 2023, a whopping 2.7 billion somoni more than initially planned. The projected government expenditure for 2024 is 5 billion somoni, with 2.2 billion somoni sought from foreign sources, Kahhorzoda added.

A look back reveals that the estimated cost of the Roghun project, originally the brainchild of Soviet engineers, stood at $3 billion when construction resumed in 2008. However, this figure climbed over the years, with 2016 officials bandying about a $3.9 billion figure, and the Energy Ministry announcing $5 billion in mid-2022 was required for full project implementation. The latest figure tossed around by Energy Minister Daler Juma in an interview is $6.2 billion. It's worth noting that this estimate falls slightly short of the $8 billion projection Juma shared in a June 2022 interview with Reuters.

While costs escalate, progress is slowing. Once complete, the six 600 megawatt turbines in Roghun will boast an installed capacity of 3,600 megawatts – enough "to power three nuclear power plants," according to WeBuild, the company contracted to implement the project. The first generating units were put into operation in November 2018 and September 2019, but limited progress has been made since then.

The government gushes about the project, touting its potential to secure a bright future for the country and making it a source of pride for every Tajik citizen. However, a sober reality is that Roghun plays a crucial role in keeping Tajikistan's economy afloat, with the population still enduring annual electricity rationing due to insufficient production. The country boasts the "youngest and fastest-growing population" in the Europe and Central Asia region, as estimated by the World Bank, underscoring the increasing demand for electricity.

Getting a clear, reliable idea of how much has been spent on Roghun over the past 16 years is no easy task. Energy Minister Juma has mentioned a figure of $3 billion in the past, while Dushanbe-based news outlet Asia-Plus recently came up with an updated estimate of around 40 billion somoni ($4 billion), leaving around $2.2 billion to secure.

Tajikistan hasn't been shy about seeking white knight investors to foot the remaining bill, but its attempts to secure foreign funding have come with significant debt-servicing expenditure. The National Bank has issued $500 million worth of eurobonds on the international market, which means Tajikistan is committed to paying around $850 million to investors by 2027. Important chunks are trickling in, with the State-backed Saudi Fund for Development contributing $100 million and China-dominated development lender Asian Infrastructure Investment Bank reportedly pledging a $500 million loan, though talks on this commitment have gone quiet. Back in 2022, the European Union's investment arm, the European Investment Bank, expressed interest in becoming the largest investor in Roghun, but that conversation seems to have withered without explanation.

Environmental concerns are another factor at play. Last month, a coalition of nongovernmental groups, including Rivers without Boundaries, the NGO Forum on Asian Development Banks, and the Bankwatch Network, appealed to development banks to demand public discussions on an updated environmental assessment of Roghun before parting with any funds. The World Bank-backed environmental impact assessment conducted in 2014 is now outdated. According to Evgeny Simonov, international coordinator for Rivers without Boundaries, the potential transboundary impacts of the hydropower plant are enormous, and their consideration in the new environmental assessment is practically non-existent.

  1. The escalating costs of the Roghun hydropower dam project in Tajikistan have led to calls from environmental watchdogs for international development lenders to reconsider funding until a fresh environmental assessment is conducted.
  2. In a press conference, Finance Minister Faiziddin Kahhorzoda revealed that the government spent 5.2 billion somoni ($475 million) on Roghun construction work in 2023, significantly more than initially planned.
  3. The projected funding for 2024 shows that 2.2 billion somoni will be sought from foreign sources, indicating an increased reliance on international finance for the project.
  4. Science and environmental-science play a crucial role in these discussions, as concerns over potential transboundary impacts and the need for updated environmental assessments are echoed by various nongovernmental organizations.

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