Asian Development Bank Allocates $ 105 Million Grant to Tajikistan for demerger of Barki Tochik
The Asian Development Bank (ADB) has approved free aid for Tajikistan in the amount of $ 105 million. These funds are provided to accelerate the implementation of ongoing reforms and improve the financial sustainability of the power sector in Tajikistan, according to a press release from ADB. “There is a financial crisis in the power sector of Tajikistan, and recovery from it requires a simultaneous solution of sector management problem, debts, tariffs, sales, on time payment collection and system losses. The reform includes:
- dividing the vertically integrated power company Barki Tojik into three independent companies responsible for generation, transmission and distribution of electricity; restructuring of excessive debt obligations of Barki Tojik;
- creating of a new regulator in power sector;
- adopting of tariff methodology;
- creating of a new centralized cash flow control system between split companies.
As part of reforms and institutional capacity building, the established power distribution company will be managed by an internationally reputable company with power utilities managing experience jon the basis of a five-year contract. The program will improve retail electricity metering and low and medium voltage distribution networks in seven cities: Dushanbe, Buston, Dangara, Isfara, Istaravshan, Kanibadam and Penjikent. The planned installation of some 370,000 modern meters will reduce metering and billing costs, reduce interruptions and improve the quality of supply to consumers. The total cost of the program is $ 145 million. Additional funds will be provided by the government of Tajikistan ($ 15 million) and the European Bank for Reconstruction and Development (a loan of $ 25 million). The program is expected to be completed in 2026. As a reminder, the government turned for help to development partners for the financial recovery of Barki Tojik OJSC. In May this year, the World Bank approved a $ 134 million grant for this purpose.