The European Bank for Reconstruction and Development (EBRD) has approved a US$100 million loan to national power utility of Tajikistan, Barki Tojik, for a project that can help unlock the untapped hydropower potential of Central Asia with a significant overall reduction of carbon emissions in the region.

The European Bank for Reconstruction and Development (EBRD) has approved a US$100 million loan to national power utility of Tajikistan, Barki Tojik, for a project that can help unlock the untapped hydropower potential of Central Asia with a significant overall reduction of carbon emissions in the region.

The loan will finance construction of the power converter station and related infrastructure in Tajikistan, as part of the high-voltage transmission line project Central Asia South Asia Electricity Transmission and Trade, otherwise known as CASA-1000.

As part of CASA-1000 project, Tajikistan and the Kyrgyz Republic are to benefit from the currently limited opportunity to sell available summer electricity surplus while Afghanistan and Pakistan will be able to access the much needed sources of reliable electricity supplies, including from hydropower in the region.

The overall CASA-1000 project involves a number of international financial institutions and donors, including the World Bank and the European Investment Bank. The total cost of the project is expected to be over US$ 1 billion.

The EBRD financing will be conditional on the state-owned power utility undertaking a series of reforms. As part of the reform agenda, third-party access rules for the cross-border transmission line will be set out and an independent energy regulator will be established.

"We are proud to support this programme that will benefit the whole of Tajikistan. Importantly, it enables a strategic cross-border project, which has the potential to become a ‘game-changer’ in this troubled region," said EBRD President, Sir Suma Chakrabarti. "CASA-1000 demonstrates the crucial importance of cooperation of international financial institutions for global development. This cooperation is especially important in Central Asia where markets do not offer funds for strategic cross-border projects".

Previously, as part of its focus on the electricity sector in Tajikistan, the EBRD arranged a financing package of US$75 million for modernisation of the Qairokkum hydropower plant in the north. The project includes an innovative climate resilience mechanism.