Some of the reforms include setting up of a new power sector regulator and adopting a tariff methodology
The grant has also been given to enhance the financial sustainability of the country’s power sector. (Credit: Asian Development Bank)
The Asian Development Bank (ADB) has approved a $105m grant to speed up the implementation of ongoing reforms for the power sector in Tajikistan.
The grant has also been given to enhance the financial sustainability of the country’s power sector.
Under the ongoing reforms, the vertically integrated power utility Barki Tojik will be unbundle into three independent companies responsible for power generation, transmission, and distribution.
The reforms also include restructuring Barki Tojik’s excessive liabilities; setting up of a new power sector regulator; adopting a tariff methodology; and setting up a new centralized cash control system among the unbundled entities.
ADB Central and West Asia finance specialist Yuki Inoue said: “There is a profound financial crisis in the Tajik power sector and recovering from this requires simultaneously addressing sector governance, debts, tariffs, sales, timely collections, and system losses.
“This program provides critical support for the Tajikistan government to implement the biggest reforms in the power sector, complementing interventions by earlier ADB energy projects and those of other development partners.”
As part of the reforms, a major international company with experience in operating power utilities will operate a newly established power distribution company under a 5-year management contract.
Further, the programme will improve low- and medium-voltage distribution networks in seven priority cities: Dushanbe, Buston, Dangara, Isfara, Istaravshan, Konibodom, and Panjakent.
To reduce cost of metering and billing, lower outage costs, and improve the quality of supply for customers, around 370,000 advanced meters are planned to be installed in Tajikistan.
The programme will involve a total cost of $145m, with the Government of Tajikistan providing $15m, and the European Bank for Reconstruction and Development providing a $25m loan.
It is expected to be completed in 2026.
Separately, ADB has granted a $171.27m loan to Myanmar to enhance the power supply network in the country.