The total cost of completing the Rogun hydroelectric power station in Tajikistan has surged to $6.4bn, with the project now expected to be finished by 2035. This updated figure was revealed in the justification for Tajikistan's sovereign rating by Standard & Poor's (S&P) Global Ratings, based on official data provided by the country’s relevant ministries and departments.
The government of Tajikistan is currently in discussions with a consortium of multilateral and bilateral lenders to secure a financing package that would cover approximately 50% of the total costs. The remaining funds are anticipated to come from the state budget and the revenues generated by the Rogun HPP, which is already partially operational.
According to S&P analysts, the proposed external financing includes $1.73bn in semi-concessional loans, $850mn in grants, and $390mn in concessional loans. This financing package is expected to become available after Tajikistan finalizes electricity supply agreements with Kazakhstan and Uzbekistan in 2024-2025.
Once construction is completed, around 60% of the generated electricity is expected to be exported to Central Asian countries, contributing significantly to Tajikistan’s energy sector and economy.
In 2023, Tajikistan allocated TJS 2.5bn ($236mn, or 2.0% of GDP) for the construction of the Rogun HPP. This level of expenditure is projected to continue until the project's completion in 2035. S&P experts highlight that the Rogun HPP currently generates about 10-15% of its total capacity, with projected revenues from electricity sales estimated at $1.1bn between 2024 and 2035. These revenues are expected to be reinvested into the continued construction of the power station.
Cost Evolution of the Rogun Project
The cost of the Rogun project has escalated since its inception. Initially, in 2008, when the project was resumed, the cost was estimated at $3bn. By 2016, during an international tender to select a general contractor for the dam's construction, the estimated cost had risen to $3.9bn.
In 2022, Tajikistan's Ministry of Energy announced that more than $5bn would be required to complete the construction of Rogun. By early 2023, this estimate had further increased to $6.2bn.
To date, over TJS 40bn (approximately $4bn) has been allocated for the completion of Rogun, sourced from the sale of shares in Rogun HPP OJSC, Eurobonds, and the state budget. The Rogun HPP, once completed, is expected to play a crucial role in meeting Tajikistan’s energy needs and boosting its economy through electricity exports.
The Rogun HPP is a hydroelectric power station being built on the Vakhsh River in Tajikistan, forming the upper stage of the Vakhsh cascade. Once completed, its dam, standing at 335 meters, will be the tallest in the world, and the plant will have a capacity of 3,600 MW, making it the largest hydroelectric facility in Central Asia.
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