For the second time in two months, a company behind a foreign-operated hydropower dam in Tajikistan has said the state-controlled electricity distributor is not paying its bills. And despite the annual winter electricity shortage, this time the company – in this case Iranian rather than Russian – has shut operations until it gets its money, Radio Ozodi reports.
A source at the Iranian Embassy in Dushanbe told Radio Ozodi that the company behind Sangtuda-2, Sangob, has stopped the dam’s output until Barqi Tojik, the chronically broke state-run energy distributor, begins paying its $28 million debt (which is growing by $2 million a month). Ozodi says the company’s offices in Dushanbe are empty.
Barqi Tojik didn’t clearly answer Asia-Plus’s questions about what’s happening at the dam on the Vakhsh River. Yet whether or not it is operating, Barqi Tojik’s ongoing failure to pay its bills underscores systematic problems in Tajikistan’s troubled energy sector.
The conflict is eerily similar to an episode last month, when Tajikistan’s second-largest hydropower plant, Russian-controlled Sangtuda-1, threatened to shut down for similar reasons. That dispute was resolved when the two sides agreed on a payment installment plan.
The Iranian-built Sangtuda-2 was due to begin operations in 2008, but launched in late 2011 and is still functioning at only half capacity. Iran reportedly paid $180 million of the $220 million construction costs in exchange for control over the dam’s revenues for 12 years.
Radio Ozodi adds that then-Iranian President Mahmoud Ahmadinejad was due to visit last February and launch the second turbine, but that the Iranian Embassy demanded a debt payment of $12 million. Barqi Tojik didn’t pay, Ahmadinejad didn’t come, and the second of two 110-MW turbines has never been launched.
Part of the problem with the sector is the low cost of electricity to consumers, which amounts to an unaffordable and untenable state subsidy. “At 2.25 cents/kWh, Tajikistan’s current electricity tariffs are amongst the lowest in the world,” said a 2012 World Bank study that called for at least a 50 percent price increase “as soon as possible.” Low tariffs create additional stress on limited and aging infrastructure: “Demand for electricity is unusually high in Tajikistan because electricity prices are low and there are limited options for heating.” Seventy percent of the population experiences “extensive” annual blackouts, according to the World Bank. Eighty percent of companies say an unreliable power supply is a “major obstacle to doing business.”