Asia and Oceania, Finance, News, Rehabilitation and Repair

World Bank approves additional financing for rehab of 3,000-MW Nurek Hydropower Plant in Tajikistan

The World Bank’s Board of Executive Directors has approved additional grant financing of $50 million from the International Development Association (IDA) for the second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan.

The 3,000-MW Nurek Hydropower Plant is the most important asset of Tajikistan’s energy system, according to a World Bank press release

“The restoration of the generation capacity of the Nurek HPP is essential for ensuring energy security for the people of Tajikistan,” said Jan-Peter Olters, World Bank country manager in Tajikistan. “Especially in these difficult times, the combination of inherent climate benefits from this renewable source of energy and the ability to support job creation and incomes for the local population, including by their engagement in this large-scale rehabilitation process, makes this a critical investment for a fast and sustainable post-crisis recovery.”

Nurek generates about 50% of total annual energy demanded in Tajikistan. Operational at about three-quarter of its installed generation capacity, the plant is undergoing its first major rehabilitation since its commissioning in 1972. Once completed, the rehabilitation will allow the Nurek HPP to increase electricity generation by about 300 million kWh, supporting the government’s efforts to ensure that energy demand can be met even during the cold winter months.

At the same time, during summer, Tajikistan would be in a position to expand electricity exports from its hydro resources, including through the CASA-1000 transmission line and upon synchronization of the country’s electricity network with Central Asian Power System. This would generate additional revenues for sustainability of the power sector, thereby reducing pressures on the pace of tariff adjustments.

The first phase of the Nurek Hydropower Rehabilitation Project — financed by the World Bank ($225.7 million), Asian Infrastructure Investment Bank ($60 million) and Eurasian Development Bank ($40 million) — was launched in March 2019. It focused on rehabilitating three of the nine generating units, replacing and refurbishing hydromechanical equipment and the key infrastructure components of the power plant, replacing six auto-transformers and enhancing dam safety with a special focus on protection against seismic hazards and floods.

Through a separate project, the World Bank is supporting the government’s efforts in strengthening the institutional capacity and financial viability of open joint stock holding company Barqi Tojik (BT).

The project’s second phase will finance rehabilitation of the remaining six generating units, the Nurek bridge, the powerhouse and other key buildings, while strengthening capacity to operate and maintain the power plant.

Capacity building will be provided to Nurek and BT to enhance dam safety monitoring and the operation and management of hydro facilities. With a total cost of $192 million for the project’s second phase, the government of Tajikistan is finalizing its discussions with other development partners to secure the required additional resources.

Given Tajikistan’s long history of power outages, particularly during the cold winter months, the climate co-benefits, and the socioeconomic development impact of using available hydro resources effectively, Tajikistan’s energy sector has been a priority area of engagement for the World Bank. Its energy-related investments exceed $530 million. These investments aim at supporting the sector’s sustainability, eliminating seasonal energy rationing, ensuring an affordable and stable electricity supply to families and businesses and much-needed revenues from increased export of clean, non-fossil energy resources.