Tajikistan needs something more than just money to use hydropower resources, says ADB official

 

Q.  Mr. Bhargava, first of all, I would like to know the purpose of your visit, whom you met with and what issues did you discuss?

 

A.  The purpose of my visit is to discuss with our main counterpart agencies the progress we have been making and what we should do in the future.

This visit is of particular importance, since currently we are preparing a new energy strategy for the region. Considering rich hydropower resources in Tajikistan, I can say that its role is very important in ensuring regional energy security. And we wanted to discuss this strategy with our partners, to hear their point of views.

As part of the preparation of this strategy, we are organizing a dialogue between energy ministers of the Central Asian Regional Economic Cooperation countries for the first time. This dialogue will take place on September 20-21 together with the energy investment forum. The idea is not only to meet with key government agencies, but also to engage with a wide range of stakeholders.

During the visit, I met with the management of the Ministry of Energy, Ministry of Finance, and Barqi Tojik.  We had good discussions. We are reassured that together we are moving in the right direction.

 

Q.  You noted the important role of hydropower resources of Tajikistan in ensuring the energy security of the region. Does ADB plan to pay more attention to this sector, the development of which could allow Tajikistan to independently move in other directions?

 

A.  ADB finances sectors and projects that are priorities for the government. ADB's cooperation with the country is reflected in our five-year partnership strategy. As part of this strategy, we have a country operations business plan. We jointly discuss and agree on what ADB will finance.

The hydropower potential of the country is really very large. But you need more than just money to use these resources. The country needs partnerships. I am talking about export-oriented hydropower resources.  If you look at the whole chain, financing comes late in the piece. All agreements need to be coordinated first.

Tajikistan should find a country to sell electricity, arrangements should be made, when a hydropower station is built, and so on.  After all these moments are addressed, then the question of financial resources for the construction of a facility comes.

To support the export potential of hydropower resources, we work very closely with the government. Last year, a project was approved for the reconnection of power systems of Tajikistan and Uzbekistan. A project of this kind will provide an opportunity to increase electricity exports to neighboring countries.

 

Q.  Improving energy security is one of the areas in the current ADB country partnership strategy with Tajikistan. The bank helps the country to reconstruct and modernize the existing energy facilities and infrastructure. Is it planned in the future to assist Tajikistan in the construction of new large facilities, e.g. Roghun hydropower plant?

 

A.  Modernizing the existing infrastructure is what we call ‘the first choice’. You will appreciate the results of this upgrade with improved energy efficiency. In other words, before building something new, it is important to get the best out of the existing facilities. This is where our immediate focus is, since we see a lot of potential in this area.

Modernized infrastructure is also essential for regional connectivity.

 

Q.  How do you view electricity tariffs set by the government to various categories of consumers? For example, population currently pays about 2 cents per kilowatt, and the Tajik Aluminum Company - 1 cent. At the same time, from September 1, tariff for the population will increase by another 17%, and for the aluminum producer it will remain unchanged.

 

A.  The issue of tariffs should be seen in a broader context. I believe that any government uses tariff increase as a tool of last resort.  To be honest, I do not know the whole methodology for setting tariffs for various categories of consumers in the republic.  I may not comment how right or wrong this is, but I want to say that financial viability of the energy sector is crucial for the whole economy.  Tariff increase is only one of the elements to achieve financial viability.  We support the government in implementation of non-tariff measures.

Cross-subsidies which you mentioned are not uncommon.  I can give you an example: even in a country like China, industry pays cheaper tariffs compared to offices and consumers. The government uses tariff increases as a policy tool to achieve economic objectives.

The issue of tariffs is very complex, there is no simple answer to it.

 

Q.  Mr. Bhargava, you have been working as Energy Director in the Central and West Asia Department of ADB for almost two years. You supervise lending in the energy sector, including in Tajikistan. Tell me how easy is it to work with the Tajik partners?

 

A.  I am very pleased to work with partners from Tajikistan.  The work we do is not easy. Tajikistan is not different compared to other countries. We have very good relations with all government structures, as well as with other partners and stakeholders, and we are proud of this partnership.

 

Mr. Ashok BHARGAVA assumed the role of Director, Energy Division, Central and West Asia Department (CWRD) of the Asian Development Bank on 30 October 2017.  In this position, he oversees energy sector lending and non-lending operations, and implementation of $7.3 billion portfolio for Afghanistan, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, Turkmenistan and Uzbekistan.  Prior to joining CWRD, he was Director (Energy), East Asia Department for 7 years and responsible for energy sector operations in the People’s Republic of China and Mongolia. He is an Electrical Engineer with a Master’s Degree in Business Administration and, multiple management and leadership trainings from Cambridge University, Harvard Business School and Ross School of Business, Michigan.