Early this year, Tajikistan’s largest industrial enterprise sent home about a fifth of its workforce and cut wages by 30 percent for the rest. According to its own figures, the state-owned aluminum plant, Talco, lost over $40 million last year and hasn’t turned a profit since 2010.
The Soviet Union built Nurek, the tallest hydropower dam in the world, and Talco, the largest factory in what is now Tajikistan, as part of a single system in the 1970s. Aluminum smelting requires vast amounts of power. The dam and the plant were to help industrialize the distant, subsidy-dependent Soviet republic.
When Bibiradja Ochildieva, a resident of Tajikistan’s capital Dushanbe, stepped into her backyard to collect her laundry one day recently, she was horrified to find her family’s clothing covered in black soot. “It was like there had been a fire,” she recounts.
In early June, a newspaper in Pakistan announced the Asian Development Bank would withdraw from a much-anticipated energy transmission project that aims to connect Central and South Asia. The report stated that security fears in Afghanistan were prompting the ADB to drop its 40 percent interest in the project.
China is financing the construction of Kyrgyzstan’s first major oil refinery, and excitement is building in Bishkek that the facility could enable the Central Asian nation to break Russia’s fuel-supply monopoly. At the same time, some observers express concern that the project may stoke local resentment, or become enmeshed in political infighting.
The Armenian government’s recent decision to prolong the lifespan of the aging Metsamor nuclear power plant– a decision supported by the United States – is provoking a public outcry. But with no replacement energy source in sight, the government maintains it has no choice but to place faith in the facility’s sole functioning reactor.
There’s a presidential election in Kyrgyzstan in a few days, but with winter approaching, the troubled energy sector is in the back of many Kyrgyz minds. Some are worrying about a “catastrophic breakdown.” A transparency initiative, though, is generating hope that the troubled energy sector can be reformed.
The recent discovery of hydrocarbon and mineral deposits in Tajikistan has the potential to transform what is now Central Asia’s most economically disadvantaged nation. Whether the Tajik government can take full advantage of the opportunity will depend greatly on its ability to offer foreign investors a higher comfort-level.