Russia Dominates Tajikistan’s Energy Sector

In the new "Great Game" between the West and Russia over the vast energy reserves of Central Asia, Tajikistan has always stood apart, owing to its geographical isolation, degraded economy, and relative lack of hydrocarbon resources. Now the poorest and most isolated of the "Stans" has been dragged into the energy tussle; but in Tajikistan’s case, the prize left to foreign governments and investors is the chance to develop and profit from its immense hydroelectric potential. At the moment Russia is the clear frontrunner, but projects are also being developed by China (the Zeravshan [Yava] hydroelectric plant) and Iran (the Shurob plant). The West and the United States have been largely uninterested up to now, but the average Tajik is less concerned about geostrategic competition than finding sufficient electrical power to survive the upcoming winter.

Tajikistan has few immediate options but to attempt to develop its hydropower assets. Only 7 percent of Tajikistan’s land is arable, and the U.S. government estimated that the country’s 2007 oil production was a paltry 280 barrels per day, and in 2006 Tajikistan produced only one billion cubic feet (bcf) of natural gas, forcing it to import 44 bcf to meet demand ("Tajikistan energy Profile," www.tonto.eia.doe.gov/country/country_energy_data.cfm?fips=TI).

Along with neighboring Kyrgyzstan, the one resource that Tajikistan has in abundance is water. About 80 percent of Central Asia’s water resources come from mountainous parts of Kyrgyzstan and Tajikistan via the Amu Darya and Syr Darya rivers. The downstream states of Uzbekistan, Kazakhstan, and Turkmenistan depend on a regular and reliable flow from the Tajik and Kyrgyz reservoirs to supply water for their agriculture, but both countries have increasingly been restricting their water outflows in the spring and summer in order to use it for generating hydroelectric power in the winter months. This policy both parches the downstream nations’ crops and causes early spring floods.

On October 18 Kyrgyz, Kazakh, Tajik, Turkmen, and Uzbek officials agreed to a arrangement that downstream states would supply Tajikistan and Kyrgyzstan with natural gas, oil, and electricity in the winter months in return for guaranteed water supplies; but it is unclear how the ad hoc pact will work out in practice; and it fails to address the outstanding issues in the long term, as it only covers this autumn and winter. Both Kyrgyzstan and Tajikistan insist that water is a fungible commodity that should be sold, a position strongly rejected by downstream states, while Tashkent insists that both rivers should be subject to international legal regimes and constraints governing transnational waterways (www.Turkmenistan.ru, October 18; Pravda Vostoka, October 18).

Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan recognized the necessity of coordinating their water polices early after becoming independent and established the Interstate Commission for Water Coordination (ICWC) in 1993 to coordinate regional policy. It has failed in fulfilling its mandate, however, causing each nation to develop its own policies (www.icwc-aral.uz/).

As the two cash-strapped nations cannot require their downstream neighbors to pay for their water, Tajikistan and Kyrgyzstan are face with another problem—where to find foreign investment for their hydroelectric ambitions. Tajikistan is in no position to finance large-scale hydropower projects on its own. Its industrial output declined by 2.5 percent from January to September (www.mail.ru, November 6).

Unlike the West, Russia is proffering Tajikistan assistance, which, if accepted, will give Moscow a commanding position in the country’s energy sector. Russia scored its most recent victory on November 5, when Tajik President Emomali Rakhmon attended a ceremony inaugurating the coming on line of the third of four turbines at the Sangtuda-1 hydropower plant (Interfax, November 5). Russia is the biggest foreign investor in Tajikistan. According to the Russian trade mission in Dushanbe, since 2005 Russia’s direct investment in Tajikistan has soared from $93 million to $300 million and now represents 75 percent of all foreign investments in Tajikistan (Itar-Tass, May 16).

In contrast, a small but telling sign of how casually Washington currently regards Tajikistan’s exploitable energy assets, the U.S. government’s Energy Information Administration has not even bothered to draft a Country Analysis Brief for Tajikistan, lumping it instead in a generic "Central Asia" study (www.eia.doe.gov/emeu/cabs/centasia/full.htm).

For the long suffering Tajik consumers, the completion of the Sangtuda hydroelectric facility means that more electricity will be available; but the bad news is that last month the head of the Barq-i Tojik (Tajik Electricity) state energy holding company, Sharifkhon Samiyev, stated that in January electricity prices were initially scheduled to rise by 40 percent in Tajikistan, to be followed by another 15 percent hike later in the year.

Samiyev stated that because of cash flow problems, Barq-i Tojik’s management had asked the government to cancel the company’s commitment to be included in financing construction of Sangtuda-2. Samiyev told journalists, "We bear great financial costs in participating in the implementation of energy projects. In addition to this, consumers owe us great amounts of money, which we have not been able to collect. Currently, electricity consumers owe us 170 million somoni [$49.9 million]” (Informatsionne Agentstvo Avesta, October 28).

The more immediate concern for both the Tajik government and citizenry is how to survive the onset of winter. In September Dushanbe began rationing electricity nationwide by means of blackouts, cutting electricity in the capital to all categories of consumers to nine hours a day (Itar-Tass, September 12). Six weeks later, the time was cut to seven hours per day.

According to the Russian ambassador to Tajikistan, Ramazan Abdulatipov, Russia has already agreed to assist Tajikistan in dealing with any possible energy shortages this winter. Abdulatipov told journalists about Moscow’s aid following a meeting with President Rakhmon, saying that the two countries had agreed to coordinate preventive measures before a crisis emerged, with Russia using its good offices to assist Uzbekistan and Kazakhstan in supplying natural gas and electricity to Tajikistan at affordable prices (Informatsionne agentstvo Avesta, October 28). According to Abdulatipov, Russia is also looking for ways to export electricity to Tajikistan via third countries.

For Dushanbe, the unanswered question is how much Russia will expect in return for its comradely assistance. Russian-Tajik bilateral trade will end the year at nearly $1 billion, and analysts expect it to triple in the near future. Gazprom has been exploring four promising natural gas deposits in the Central Asian republic; and as for Sangtuda, Abdulatipov noted enthusiastically, "The Sangtuda project is just the beginning of Russia’s business in Tajikistan” (Itar-Tass, October 21).

Russia is enjoying similar success in Kyrgyzstan; Last month, while referring to Kyrgyzstan’s Kambar-Ata-1 and Kambar-Ata-2 hydroelectric facilities under construction, the Kyrgyz ambassador to Russia, Raimkul Attakurov, told a news conference, "We give preference to Russia, as the country has supplied our hydroelectric power plants, which were built in the Soviet era, with equipment (Itar-Tass, October 24).

The last winter in Tajikistan and Afghanistan was the most bitter in 50 years, with temperatures dropping below minus 20 degrees Celsius (minus 4 degrees Fahrenheit). Severe power rationing was imposed in Kyrgyzstan and Tajikistan, but the harsh weather there and in Afghanistan killed and injured hundreds. For many Tajiks, next spring the good news will be that they did not freeze to death; the bad news is that they will be poorer than ever after paying their electricity bills.

According to Tajik Labor and Social Protection Minister Shukhurjon Zuhorov, at least 50 percent of Tajikistan’s population lives below the poverty line on less than $1 a day. At the height of last winter’s energy crisis Zuhorov told journalists, "If no drastic measures are taken to curb inflation in Tajikistan, the government’s efforts to tackle poverty will not produce the desired result” (Interfax, January 23). If Zuhorov’s ministry is sincere about tackling poverty, then they should sit down immediately and hold some "frank and candid" discussions with Barq-i Tojik officials, even if they have to bring their own candles.