Tajikistan cancels RUSAL deal to build 3,600-MW Rogun

The government of Tajikistan announced August 29 that it decided to formally cancel its agreement to build the 3,600-MW Rogun hydroelectric project with Russian aluminum company RUSAL.

The press service of Tajikistan President Imomali Rakhmon said government officials canceled the US$1.3 billion agreement, as had been urged earlier by Rakhmon.

The announcement was the latest step in a deteriorating relationship between Rakhmon’s government and RUSAL. Rahkmon said in May his government would seek US$1.3 billion in foreign investment elsewhere to complete Rogun. (HNN 5/1/07)

In 2004, Rakhmon granted RUSAL the right to complete the construction of Rogun, on the Vakhsh River, in return for a Russian promise of investment in the impoverished Central Asian state. However, Tajikistan broke the deal with RUSAL in 2006 over technical disagreements. Russia offered its utility monopoly, Unified Energy Systems (UES), as a replacement contractor.

A statement by RUSAL said the aluminum company had not been notified of the action. A spokesman told Russian agency RIA Novosti such agreements cannot be terminated unilaterally.

Construction of Rogun began in the Soviet era but ceased with the break-up of the Soviet Union.

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