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Source: www.asiaecon.org |

TAJIKISTAN : WHAT GOES AROUND COMES AROUND


  With the start of the new year, Tajikistan faced an increase in energy prices accompanied by frequent power cuts throughout the country. Following the New Year's celebrations, the prices of electricity and natural gas both rose rapidly, making them luxury commodities available only to a privileged few. A more threatening stance is Tajikistan's rising debt, that must be paid in the near future.


With the start of the new year, Tajikistan faced an increase in energy prices accompanied by frequent power cuts throughout the country. Following the New Year’s celebrations, the prices of electricity and natural gas both rose rapidly, making them luxury commodities available only to a privileged few. A more threatening stance is Tajikistan’s rising debt, that must be paid in the near future.

However, the situation is not as severe as it was during the calamitous winter of 2007. On one hand, the majority of cities and urban centers of Tajikistan have a regular supply of electricity, with only a few hours of blackouts per day. On the other, power cuts lasting for up to 15 hours per day are experienced in the numerous villages and suburban areas that make up most of the predominantly rural Tajikistan.

On Thursday, January 1, Uzbekistan increased the cost of gas by 54 percent, bringing it to $240 per thousand cubic meters (tcm) from $145 for the previous year. At the same time, it halted transit supplies of energy to Tajikistan from Turkmenistan, supposedly to fix the transmission lines in question. In general, cooperation with Uzbekistan has always been complex.  In 2007, Dushanbe and Ashkhabad reached a five year agreement where Turkmenistan agreed to export 1,2 bn kWh of electricity to Tajikistan during the winter season via Uzbek territory. In October 2008, this agreement was further amended, with Turkmenistan consenting to export 1,3 bn kWh to Tajikistan during the winter months of December 2008 and January 2009. 

In response to Uzbekistan’s 10 percent projected increase in transit cost of electricity, Barki Tojik,  Tajikistan’s state owned electricity company, decided to raise fees by 25 percent on local electricity consumption. Barki Tojik expounded its decision by stating that its main objective is to embellish Tajikistan’s energy sector for further foreign investment.

Even though Tajikistan possesses abundant resources of natural gas, its extraction is very expensive and complicated due to its deep location. Nevertheless, Tajikistan is expected to become self sufficient in gas by 2011, making it free from the gasps of neighboring countries. Extraction might take some time, but Companies like “Gazprom” and “Tethys petroleum” are already present at numerous sites. Moreover, the Rogun hydro station project that is estimated to cost around $3.2 billion, has the potential to make Tajikistan not only energy self-sufficient, but also one of the major regional exporters of electricity.


Currently, the World Bank is in charge of the financing of the the Rogun hydro Station, it created an international consortium that would allow a number of countries to invest in it. However, with the current liquidity squeeze and economic downfall in the world economies, international lending or investment for big projects, such as Rogun, will be very difficult to execute.

Looking on the brighter side of the global financial crisis’s effects on energy in Tajikistan, TALCO, an aluminum smelter that consumes around half of Tajikistan’s electricity, is facing decreasing demand, thus lower production and less electricity consumption. This will allow more internally produced electricity to reach common households. For the time being, however, people just have to get used to the regular electricity cuts that are accompanied by high prices for natural gas.

Uzbekistan has always expressed its unwillingness to sell gas and electricity to Tajikistan due to its rising debt for these commodities. However, this tactic of non-negotiation is a two-edged sword, because when the spring comes, Uzbekistan will rely on the water flowing through Tajik territory to its countless cotton fields.

Tajikistan,desperate from its lack of electricity, has announced a state of emergency, where it started using its hydroelectric stations to produce electricity, by releasing water out of the reservoirs.  Since much water has already been released to produce the much-needed electricity, problems for the whole region in terms of water scarcity during the agricultural spring season will inevitably arise.

 

Source: Asiaecon.org

Source: www.asiaecon.org |


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