EBRD finances energy distribution system in Tajikistan

By Sergiy Grytsenko

The European Bank for Reconstruction and Development (EBRD) is helping to modernise the distribution of electricity in Tajikistan with a loan that will improve energy efficiency in the power system and enhance power services to customers.

A €7 million (US$ 10.15 million) loan to Barki Tojik, a state-owned power utility company, will be used to fit the company’s facilities with new electricity meters, meter-reading and automated billing systems, which will reduce losses and improve power supplies across the country.

In addition, this project is co-financed by the European Investment Bank (EIB), which will make available a parallel loan of up to €7 million, and the European Union, through its Investment Facility for Central Asia (IFCA), with a possible grant of €7 million which has yet to be approved by the IFCA Operational Board.

The investments will result in a more efficient use of existing energy resources, rehabilitate low voltage network and increase electricity supplies to Tajikistan’s second largest city Khujand and the country’s north-western Sugd region.

Speaking at the signing ceremony in Luxembourg, which was attended by the President of the Republic of Tajikistan Emomali Rahmon and the EIB President Philippe Maystadt, Riccardo Puliti, EBRD Managing Director for Energy and Natural Resources, said that with the new investment, the EBRD – together with other international financial institutions – supports the Government of Tajikistan in its efforts aimed at restructuring the national power sector.

“We are very pleased to co-finance this important project which contributes to the modernisation of Tajikistan’s energy sector by reducing losses, increasing the sector’s efficiency and providing better services to customers. After the installation of up to 100,000 new meters we expect to see an almost two-fold decrease in energy losses within the distribution network, while the new billing system will increase the number of payments collected from the residential customers by 20 per cent,” Mr Puliti added.

The Minister of Finance of the Republic of Tajikistan Safarali Najmuddinov, who signed the guarantee agreement on behalf of Tajik authorities, praised the importance of joint efforts by the EBRD, the EIB and the European Union to support Tajikistan in bringing tangible and immediate improvements in the country’s power distribution sector.

In Tajikistan, the EBRD focuses on promoting small private businesses, developing the banking sector and improving critical infrastructure. The Bank is also supporting the development of the agricultural sector, with a special emphasis on providing loans to farmers. In 2010 the EBRD’s investments amounted to a total of €21.6 million (US$ 29 million).

To date, the EBRD has committed over €110 million (US$ 147.4 million) in various sectors of the Tajik economy and is mobilising additional investments in excess of €60 million (US$ 80.4 million).