The European Investment Bank (EIB), together with the European Commission, is working to determine the possibilities and conditions for financing the Rogun project, Asia Plus was told at the central office of this Bank.
The EIB’s written response states that this work is currently “in the early stages of project evaluation”.
“The final decision on the details of our participation will depend on the fulfillment of a number of preconditions, including project guarantees, procurement and other critical elements for the project,” the response said.
Also, the EIB office notes the importance of determining the “potential impact of the project outside of Tajikistan” – on neighboring countries.
“The EIB can support projects with both advisory support and long-term financing, as well as combine grants from the European Union with EIB funding,” the Bank emphasizes.
In the EIB response, the importance of the Rogun project is noted by the fact that it will help “separate the Tajik economy from fossil fuels (hydrocarbons – ed.) and create an environmentally friendly, sustainable and renewable source of electricity.”
The European Investment Bank is a public financial and credit institution of the European Union for financing the development of backward European regions in the form of long-term loans. It was established in 1958 with the aim of providing loans for the construction and reconstruction of facilities that are of interest to the EU countries.
Recall that at the beginning of this month it was reported that the EIB plans to become the largest investor in the Rogun HPP.
This step was explained by the representatives of the EIB by reducing the dependence of the countries of Central Asia on Russia and China.
The Ministry of Energy and Water Resources of Tajikistan later confirmed to Asia Plus that negotiations were underway with the European Union.
“However, it is too early to talk about any specific amount, since the negotiation process has not yet been completed,” they said.
The Minister of Economic Development and Trade of Tajikistan, Zavki Zavkizoda, said at a press conference in mid-July that the possibilities of financing the Rogun project were discussed by the government of the republic with development partners in December last year, and the World Bank is coordinating these works at the request of the government of Tajikistan.
He noted that, in particular, the amount of the required amount is being determined for the further construction of the Rogun HPP, after which each development partner will consider its possibilities to finance the project.
At the beginning of the second decade of this month, President of Tajikistan Emomali Rahmon expressed confidence that all work related to raising funds to complete the construction of the station would be completed by the end of this year.
He noted that the World Bank specialists went to the Rogun construction site and carried out the necessary additional studies.
“In the future, in cooperation with the World Bank, a number of works will be carried out to attract the necessary funds,” the President said.
The Rogun project in 2008, when its implementation was resumed, was estimated at $3 billion. Then the cost of the project in 2016 during an international tender was announced at $3.9 billion. Now, according to the Ministry of Energy of Tajikistan, $5 billion is needed to complete the construction of the station .
The leadership of the Ministry of Energy explained the increase in the cost of the project by reassessing the cost of some works on Rogun, inflation, as well as a decrease in the purchasing power of the US dollar.
Currently, the Rogun project is financed exclusively from public funds, which are not enough for the planned completion of the facility. In 2022, 2.6 billion somoni will be allocated from the state budget for the completion of Rogun.
According to official data, in 2008-2021, more than 31 billion somoni was allocated for the implementation of this project.
Reference
The Rogun HPP will be the largest hydroelectric power plant in Central Asia, with an installed capacity of 3,600 MW.
The annual volume of electricity generation after the plant is fully commissioned will be from 13 to 17 billion kilowatt-hours. This is approximately 75% of the annual electricity generation by all operating capacities in the republic.
At the moment, two Rogun hydroelectric units are operating at low capacities. In general, it is planned to install six units in the turbine hall of the station, the design capacity of each of which will be 600 MW.
The construction of the station is expected to be fully completed by 2033.