Tajikistan continues to fund Sangtuda HPP construction




December 16, 2009, Rakhim Nazarov

Tajik national energy company Barki Tochik has begun to meet its financial obligations before its Iranian partner, the Farob company, on the construction of the Sangtuda hydroelectric power plant.


Sangtuda HPP-2 is a Tajik-Iranian investment project, launched in February 2006. Iran has allocated US $180 million for the construction of the plant, and the Tajik government’s share is $40 million. According to schedule, this year Tajikistan was supposed to allocate $12 million for construction works but only $6 million has been allocated from the state budget so far. The remaining amount was to come from Barki Tochik. However, the company has been postponing money allocation citing financial difficulties.

Last summer, Farob, the general contractor of the project, appealed to the government of
Tajikistan asking the Tajik side to meet its financial obligations, since a lack of funding might cause delays in construction works. Later, about 50 workers went on strike demanding the payment of wage arrears for two months. The general contractor paid the arrears but the Tajik side then failed to meet its financial obligations.

Early in October, Barki Tochik asked the Tajik government for financial assistance to solve the problem. As a result, by mid-December, the Ministry of Finance has given Barki Tochik an interest-free loan in order to meet its financial obligations before the Sangtuda HPP-2 company. The loan is worth more than 10.4 million somoni ($2.4 million) and was issued for a period of 1.5 years.

According to the project conditions, all income from the power plant after putting it into operation will go to
Iran during 12.5 years. At the end of this period, the plant will become the property of Tajikistan. The power plant will be completed in 2011.