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By Kamila Aliyeva

The Government of Tajikistan plans to fully pay off its external creditors which have acquired Tajik government bonds (Eurobonds) till 2028, Central Asian media outlets reported.

As many as $500 million, attracted last year due to the sale of government securities, is spent on the completion of the Rogun HPP.

“Starting from this year, the state budget annually provides for certain funds to repay these loans. The return of all money to creditors with interest is planned in 2025-2027,” the Ministry of Finance of Tajikistan said.

The Ministry of Finance noted that up to the present moment about $200 million have been used for the construction of Rogun at the expense of these funds.

“Of this amount, $134 million was paid to the general contractor as an advance payment, and about $65 million was spent on direct construction work,” the ministry added.

The government of Tajikistan, which has suffered from electricity shortages for years, makes all possible efforts to complete the construction of dam that will solve the country’s energy problem.

By implementing the project, Tajikistan will be able to generate about 13 billion kilowatt-hours of electricity annually. This will not only help the country to meet its domestic needs but also turn Tajikistan into a major exporter of electricity.

According to the project, six units are planned to be installed at the station, each with a capacity of 600 MW.

The station will become the highest rock-earth dam in the world. This HPP will generate 17 billion kWh of electricity annually.

Approximately $4 billion is needed to complete the major energy project. About 2 billion somoni ($227,2 million) have been allocated from the state budget for the completion of the hydroelectric power station this year.

Therefore, the Tajik authorities decided to issue securities worth $1 billion for the completion of the Rogun HPP in 2017. At the first stage, bonds worth $500 million were put up for sale on the world markets.

According to the National Bank of Tajikistan, Tajik government bonds by type of investors were sold to fund managers (85 percent), hedge funds (9 percent), banks and other financial institutions (6 percent). Geographically, the bonds were acquired by investors from the United States (38 percent), Great Britain (24 percent), EU countries (percent) and Asia (3 percent).

The dam should form a large Rogun reservoir with a total volume of 13.3 cubic meters. The project is criticized because of the location in the zone of high seismicity, landslide and mudflow processes, and the presence of a tectonic fault filled with rock salt under the base of the dam.

The Rogun HPP will dam the Vakhsh river, which is a major tributary to the Amu Darya river, one of the region's two major water courses. The neighboring countries cautioned water could be diverted from their cotton and wheat fields. Uzbekistan claimed that water flows would be seriously decreased in case the dam is built. However, the World Bank assessment gave the go-ahead to the major project.

The Italian company Salini Impregilo is engaged in the construction of the Rogun power plant. In October 2016, Tajikistan launched work on the construction of a rock embankment dam, 335 meters high and $1.95 billion worth. The cost of the entire hydro power station is $3.9 billion.

At the end of January, the head of the company, Pietro Salini, after a meeting with Tajik President Emomali Rahmon, told reporters that the first turbine of the Rogun hydro power plant will be launched on November 16, 2018.

Last week, Finance Minister of Tajikistan Fayziddin Kakhhorzoda said that the financing of the construction of the Rogun HPP is currently being carried out within the framework of the needs of this facility at the expense of the budget and attracted external funds.

“There are no difficulties in this issue at the moment,” the minister added.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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