After enduring extreme cold this past winter, Central Asia is bracing for what some officials say will be a dry summer. Those predictions, in turn, are stirring fears of prolonged power shortages that seriously impair economic functions.
The severe winter has already upended Central Asia's always tenuous water balance. Central Asian states have traditionally been subject to seasonal swings in water supplies going from inundated in the spring to scorched in the summer and fall. Due to the exigencies of winter, many reservoirs are far lower than normal. Given that the bulk of Central Asia's power comes from hydro-electric stations, the looming water shortage could hamper the generating capacity of dams.
Complicating matters is the fact that water management has tended to be oriented toward agriculture, not industry. In theory, the region still relies on a system devised during the Soviet era, under which upstream countries Tajikistan and Kyrgyzstan are supposed to collect water in winter and release it to arid downstream states Kazakhstan, Turkmenistan and Uzbekistan in summer to irrigate crops and cotton fields. The system, however, has broken down amid the clash of national interests.
Tensions reached a peak this winter. The harsh weather forced Kyrgyzstan and Tajikistan to use a far greater than normal amount of water for energy generation. This means that summer shortages are projected to be acute. The situation has brought to the fore the lack of progress between the five states in reaching agreement on water usage.
"The lack of regulation in questions of joint use of water resources could lead to difficult consequences in the region," Kyrgyz Prime Minister Igor Chudinov cautioned at an April 14 meeting with foreign diplomats, according to the government website. "The last unusually cold winter can serve as an example of this." Kyrgyzstan was forced to use more water to increase output at the Toktogul hydropower station, he said, and will have to reduce output over spring and summer to store up water to generate energy next winter.
This will hit the agricultural sectors of downstream states hard. "Neighboring countries will be forced to review the structure of sowing cotton and other cultures in the direction of reducing sown areas, and that means a good deal of economic losses," Chudinov added.
Central Asian states have been debating a solution to the water distribution problem since the early 1990s, but with each putting national interests first consensus has always eluded them. [For background see the Eurasia Insight archive]. The downstream countries insist that water should be a shared commodity, while the poverty-stricken upstream states see it as a potential source of income. Kyrgyzstan and Tajikistan argue that not only do they fail to profit from their water resources; they also lose out since their neighbors do not fairly compensate them for the upkeep of hydropower facilities that benefit the whole region.
In the absence of a coordinated approach, states are seeking unilateral solutions. Tajikistan and Kyrgyzstan plan major hydropower projects to solve domestic energy shortages and to earn hard currency from electricity exports. Kazakhstan, meanwhile, announced in March that it would spend half a million dollars building the southern Koksaray reservoir. With a capacity of 2 billion cubic meters, the facility is expected to prevent winter floods caused by water released from neighboring states. In an indication of how pressing the government considers the problem, construction is to start in June.
As the economic powerhouse of Central Asia, Kazakhstan is exuding a sense of urgency as it strives to address its water-related issues. The need to secure enough power to keep the country's economy growing is of paramount concern to Astana. Potential steps under review range from building a new reservoir to investing in hydropower facilities in neighboring states.
Energy Minister Sauat Mynbayev, speaking during a cabinet session on April 22, indicated that a water shortage could have serious consequences later in 2008. He announced that during the first quarter of this year, a time when water supplies tend to be abundant, electricity consumption had far outpaced production. The trend left Kazakhstan with little to spare for coming months. "The country has no reserve capacities," Mynbayev said.
This year's flooding in Kazakhstan was unusually severe, displacing around 13,000 people and causing over $100 million in damage. The potential toll to the economy could be much higher, if there is a serious power shortage this summer.
Kazakhstan could obtain perhaps the fastest fix by investing in its neighbors' hydropower facilities. KazKuat, a Kazakhstani entity, is currently is working with Russia's Unified Energy System on a feasibility study for Kyrgyzstan's gigantic Kambarata project, two power stations that are projected to cost over $2 billion. [For background see the Eurasia Insight archive].
While it is not yet clear who the investors will be, Kazakhstani companies are tipped as strong potential bidders. That Kyrgyzstan sorely needs outside investment was highlighted when Chudinov announced that rising costs for materials and equipment had forced the government to rethink financing for the Kambarata-2 construction project. Kazakhstan's electricity grid operator, KEGOC, has expressed an interest in investing in Kambarata.
Elsewhere, the Eurasian Development Bank, a Russo-Kazakhstani venture, earlier in April expressed an interest in financing Tajikistan's Rogun hydroelectric power station. That project has remained on hold since last August, when Tajik leaders abrogated a deal with the Russian aluminum conglomerate, Rusal. [For background see the Eurasia Insight archive]. President Imomali Rahmon said at the time that Tajikistan would fund construction itself, but with the economy in a dire state, and following this winter's economic implosion, he must consider other options. [For background see the Eurasia Insight archive]. Beyond Rogun, Kazakhstan is potentially interested in investing in the planned Nurobod power plant in northern Tajikistan, due for commissioning in March 2009.
Although there has been much talk about establishing a Central Asian water and energy consortium, little progress has been achieved. A conference in Bishkek on April 29-30 offers yet another opportunity for agreement, and, in light of last winter's experience, some observers are optimistic that consensus can be found. "Those participating in the process of drawing up an agreement on the problems of water and energy in the region are gradually rejecting selfishness, realizing that pragmatism and partnership relations are perfectly compatible things," said an April 9 editorial appearing in Expert Kazakhstan magazine.
One forum that may help the states find a compromise is the Eurasian Economic Community, of which all Central Asian states except Turkmenistan are members. The EAEC has put forward a roadmap to resolve the thorny issue of sharing water. The blueprint proposes finding a suitable fuel and energy balance for the countries, attracting financing for Kambarata, restoring Soviet principles of irrigation for downstream states, joint investment in building power stations, removing barriers for electricity companies in a common market for member states and setting up regulatory bodies. It remains to be seen whether the leaders can put aside their rivalries and find the political will to resolve the problem of water use that has dogged them for the last 17 years.
Joanna Lillis is a freelance writer who specializes in Central Asia.