China Eximbank provides $51 million preferential buyer’s credit to provide additional support to 500 kV North-South Power Transmission Line Project and 220 kV Lolazor-Khatlon Transmission Line Project (Linked to Project ID#39984 and #39644)

On May 15, 2009, China Eximbank and Government of Tajikistan signed a $51,000,000 preferential buyer’s credit (PBC) agreement to provide supplemental financing for the 500 kV North-South Power Transmission Line Project and 220 kV Lolazor-Khatlon Transmission Line Project. Both of these projects were supported by China Eximbank loans issued in 2006 (as captured via Project ID#39984 and Project ID#39644). The borrowing terms of the $51 million loan are unknown. However, it is known that the Government of Tajikistan used the proceeds from this PBC loan to on-lend to OHSHC “Barqi Tojik” -- a state-owned enterprise in Tajikistan responsible for the generation, transmission, and distribution of electricity and thermal energy -- at a 3% interest rate between May 29, 2007 and December 21, 2028. OHSHC “Barqi Tojik” was expected to use the loan proceeds to partially finance a commercial contract with TBEA Co., Ltd. The loan's amount outstanding was TJS 401,686,000 as of December 31, 2016, TJS 449,769,000 as of December 31, 2017, TJS 480,910,000 as of December 31, 2018, and TJS 413,643,000 as of December 31, 2019. The purpose of the 500 kV North-South Power Transmission Line Project was to construct a 500 kV electricity transmission line that would connect the northern Sughd region to the national grid. The project also expected to facilitate the effective dispatching of electricity between Dushanbe and Khujand, completely solve the problem of power shortage in the south during the dry season in winter, build a transmission channel for the implementation of the Tajik Hydropower Strategy, improve the safety, stability, and reliability of the power grid, and reduce the loss of electricity through transmission from 14% to 3.2%. The purpose of the 220 kV Lolazor-Khatlon Transmission Line Project was to construct a 90 km, 220 kV electricity transmission line between Dangara and Kulab. The transmission line was designed to connect the southern region to the national grid. It was also expected to provide the Khatlon region with electricity from the Sangtuda 1 and 2 hydroelectric power plants, and allow for the export of electricity to Afghanistan. The 220 kV Lolazor-Khatlon transmission line has a capacity of approximately 4 billion kWh of electricity a year. TBEA Co., Ltd. was the contractor responsible for the implementation of both projects. The North-South transmission line has been operational since November 29, 2009. The Lolazor-Khatlon transmission line has been operational since June 25, 2008.

Additional details

1. The project is linked to previous financial commitments for the 500 kV North-South Power Transmission Line Project (captured via Project ID#39644) and the 220 kV Lolazor-Khatlon Transmission Line Project (captured via Project ID#39984) in 2006. 2. For the time being, the interest rate field (3%) and the maturity field (19.5 years) are based on the interest rate and final maturity date identified in the subsidiary loan agreement with OHSHC “Barqi Tojik” rather than the PBC agreement with Tajikistan's Ministry of Finance. This issue warrants further investigation.

Number of official sources

7

Number of total sources

10