China Eximbank provides RMB 546 million government concessional loan for 500 kV Power Transmission Lines from Rogun Hydropower Plant to Dushanbe Project

On September 1, 2017, the Export–Import Bank of China and the Ministry of Finance of the Republic of Tajikistan signed an RMB 546,032,200 government concessional loan (GCL) agreement for the 500 kV Power Transmission Lines from Rogun Hydropower Plant to Dushanbe Project according to a China EXIM Bank report and multiple Tajikstan government sources. According to Avesta, the loan carried the following terms: a maturity period of 25 years and 1.5% interest rate per annum. The loan agreement was ratified by the Tajik parliament in December 2017. The loan's (principal) amount outstanding was TJS 0 as of December 31, 2017, TJS 618,614,000 as of December 31, 2018, TJS 756,691,000 as of December 31, 2019 and TJS 945,345,000 as of December 31, 2020. The Government of Tajikistan used the proceeds from the PBC to on-lend -- through subsidiary loan agreement No. TAJ-2017-02 (BT-039), dated September 29, 2017 -- to Open Joint Stock Holding Company (OHSHC) “Barqi Tojik” at a 3% interest rate between December 29, 2017 and August 21, 2042. As of OHSHC “Barqi Tojik” was a state-owned enterprise in Tajikistan responsible for the generation, transmission, and distribution of electricity and thermal energy. The project involved the construction of two 500 kV, high voltage power transmission lines with a length of approximately 100 km from the Rogun hydropower plant in the town of Obi Garm (within the district of Rogun) to Dushanbe. The Dushanbe-Obigarm project was designed to improve reliability and quantity of supplied energy and reduce losses in the Rasht Valley of Tajikistan, where the Nurabad, Rasht, Tajikabad, Tavildara and Lakhsh districts are located. The Dushanbe-Obi Garm 500-kV power transmission line would also help increase the export of Tajik electricity to neighboring countries. The connection between the power grids of Districts of Republican Subordination and the southern power grid would also be improved. According to the 03/29/2019 Sputnik article, the transmission lines were to pass through the territories of Faizabad, Vahdat, Rudaki and Varzob. A substation, Dushanbe-500 substation, was also to be constructed as part of the project. Chinese company Tebian Electric Apparatus Stock Co., Ltd. (TBEA) was contracted to implement the project. In addition, according to PowerChina, Hubei Engineering Company Engineering Construction Company was involved in the project's implementation. Construction began on October 1, 2017. The project was completed and put into operation on November 16, 2018 according to Tajikstan's Ministry of Energy and Water Resources. There are some indications that the China Eximbank loan for the 500 kV Power Transmission Lines from Rogun Hydropower Plant to Dushanbe Project may have underperformed vis-a-vis the original expectations of the lender. According to a 2021 IMF report, ‘[OHSHC “Barqi Tojik”] has significant arrears to the government on [foreign exchange] denominated loans. The government on-lends concessional [foreign exchange] loans […] from multilateral and bilateral agencies to [OHSHC “Barqi Tojik”] on non-concessional terms. These loans are denominated in [foreign exchange] and are intended to develop the energy infrastructure. However, these debts are not serviced fully, resulting in [foreign exchange] arrears to the government.’ A 2021 report by the International Energy Agency (IEA) elaborated on this point, explaining that ‘[a] high rate of uncollected payments for electricity use due to illegal connections, power theft and outdated metering infrastructure contribute to the worsening financial health of Barki Tojik.’ Then, in March 2023, the IMF published a report, which noted that ‘[I]n 2021 the SOE sector […] kept accumulating debt service losses, where within a year the amount of debt overdue payments […] increased from TJS 14 billion to TJS 17 billion (17.1 percent of GDP). Some 93 percent of accumulated overdue debt belongs to [OHSHC “Barqi Tojik”].’

Additional details

1. This project is also known as the 500-kV transmission line Dushanbe-Obi Garm Project or the Project "Reconstruction and construction of 500 kV power transmission line in the republican subordination." The Russian project title is Линия электропередачи 500 кВ «Душанбе-Рогун» or проекта реконструкции высоковольтной 500-киловольтной линии электропередачи районов республиканского подчинения. 2. Note that Rogun Hydropower Plant is sometimes also referred to as Roghun Hydropower Plant. 3. Some sources, including press releases from Tajik government ministries, denominated the loan amount in USD ($79 million USD). However, China Eximbank government concessional loans are always denominated in RMB. The loan for the 500 kV Power Transmission Lines from Rogun Hydropower Plant to Dushanbe Project is also denominated in RMB in the audited financial statements of Open Joint Stock Holding Company (OHSHC) “Barqi Tojik”. 4. The loan identification number in the audited financial statements of Open Joint Stock Holding Company (OHSHC) “Barqi Tojik” is TAJ 2017-02 (БТ-039).

Number of official sources

16

Number of total sources

34