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Tajikistan Energy Opportunities:

Ambassador Shirinov Discusses Energy Issues

On May 26, 2010, His Excellency Abdujabbor Shirinov, Ambassador of the Republic
of Tajikistan to the United States, granted an interview with a large focus on energy
issues and on how they are affecting his country. Ambassador Shirinov spoke openly
about the energy and water shortages impacting the region, joint collaboration
between Tajikistan and Afghanistan to address its needs such as energy, the
construction of a large hydro-power dam seen as key to Tajikistan’s energy security,
and oil and gas exploration where preliminary assessments tend to show an
untapped potential that could lead Tajikistan to energy independence.

Little is known about Tajikistan, a Central Asia country bordered by Afghanistan to

the South, China to the West, Kyrgyzstan to the North and Uzbekistan to the East.
However, Tajikistan could play an important role in helping stabilize Afghanistan, a
country with which is shares a 1,206 km --long border and where the Tajiks are the
second largest ethnic group after the Pashtuns. Tajikistan, could also become an
important strategic route for the transit of goods as it once was during the Silk Road
times, as well as for the transit of energy (oil & gas pipelines and electricity high
power lines), though the free flow of people and goods remains a challenge in
Central Asia, both for political and geographical reasons.

Just like its neighbor Kyrgyzstan, Tajikistan is water-rich but energy-poor, unlike
Kazakhstan, Turkmenistan and Uzbekistan. With 93% of its territory composed of
mountains, Tajikistan has a huge hydropower potential of more than 527 billion
kilowatt-hours of electricity per year but present day production stands at only 16.5
billion kilowatt-hours.

Your Excellency, what are, in your opinion, the top three energy issues
affecting Tajikistan and Central Asia in general?

There are three top issues strictly related to energy that pose big challenges for
Tajikistan and Central Asia as a whole: 1. Energy Exchange Issue; 2. Water Usage
and Distribution Issue; and 3. Mutual Understanding and Cooperation Issue. All
three issues are interconnected and of equal importance. We cannot put them in a
specific order. Let me elaborate on each one.

Energy Exchange Issue – As a whole Central Asia cannot be called energy deficient.
The region is rich in both fossil and renewable sources of energy that can meet the
needs of the economy not only in the region, but also in other countries beyond
Central Asia. One of the regional characteristics is that natural resources are
unevenly distributed throughout Central Asia: some countries like Kazakhstan,
Turkmenistan and Uzbekistan are blessed with well developed fossil sources of
energy and others like Tajikistan and Kyrgyzstan don’t have these sources of energy,
but have a large potential with hydro-energy resources, which can be the source of
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very cheap, ecologically clean and renewable energy. Yet, unfortunately, these
resources as you rightly mentioned are under-utilized. Our country takes the 8th
place for its waterpower resources in the world. The country uses only 16-17 billion
kilowatt/hr (less than 5%) from a total of 527 billion kilowatt/hr that potentially
could be used. The annual needs of Tajikistan for electricity comes to 22 - 24 billion
kilowatt/hr. The deficit of electricity, mainly in the winter period, reaches 4 -5
billion kilowatt/hr. Under the Soviet period, the energy surplus of upstream
countries used to be given to the integrated energy system of Central Asia in the
summer period and given back in the winter period. The compensation system
dealing with the underproduction of electricity in autumn and winter periods - that
used to cover losses caused by land sinking and land flood in upstream countries
through equivalent heat and energy supplies from downstream countries - used to
be the major principle of success of the system. Such compensation was reasonable
and fair and it allowed proper energy supply for Tajikistan in the winter period as
well as uninterrupted water supply for downstream countries in the summer
period.

Unfortunately, the economic ties including the previously mentioned mutually

beneficial compensation system broke down after the collapse of the USSR and the
situation on water and power settlements in the region has progressively
deteriorated. Thus, the failure of the energy system that had been operating over
many years mainly caused the current regional water and power contradictions.
Tajikistan faces critical electricity shortage that limits the economic development of
all sectors of the economy, public health, education, food supply, job creation and
poverty reduction at large. Frequent natural disasters (winter frost, mudflows,
floods, landslides, droughts and others) create additional problems for the economy
and the people of the country.

2. Water Usage and Distribution Issue - Extensive irrigation in Central Asia have
resulted in large ecological problems such as the drying of the Aral Sea, leading to an
economic catastrophe. In the 1950s, 2.6 million hectares of land were irrigated in
the region. At the beginning of this century the area of the irrigated land reached 9
million hectares! Moreover the lion’s share of irrigated land is used for the growing
of water thirsty crops like cotton and rice. These circumstances are reflected in the
water balance with now very little water flowing to the Aral Sea. Another connected
issue is the sharp demographic increase in the region. We should also mention the
climate change and the worldwide melting of snowcaps and of glaciers that is also
affecting Tajikistan, which is a mountainous country.

I want to share with you some data about water balance of Central Asia. Tajikistan,
Kyrgyzstan and Afghanistan are located in the water flow generation of the Sirdarya
and Amudarya – the two largest regional rivers. Tajikistan is the richest regional
country by its water resources and it accumulates about 64 km3 of total 115 km3
water flow of the Aral Sea Basin and accumulates approximately 55.4% of total
water flow of the Aral Sea Basin while Kyrgyzstan accumulates 25.3%, Uzbekistan -
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7.6%, Kazakhstan - 3.9% and Turkmenistan - 2.4% correspondingly. Other

countries: Afghanistan, China and Pakistan all get out 5.4% of the total water flow.
In accordance with quotas from the Soviet period, Uzbekistan consumes 50.5%,
Kazakhstan 42%, Tajikistan 7% and Kyrgyzstan 0.5% of total Sirdarya River water
flow as for the Amudarya River water flow, Uzbekistan consumes 42.2%,
Turkmenistan 42.3%, Tajikistan 15.2% and Kyrgyzstan 0.3% of total water flow.
According to the Information and Research Centre of the Interstate
Coordination Hydroeconomic Commission (IRC ICHC) the mean value of the water
unit requirement in the world is 700-m3/per man/year while by
2003 this figure for Kazakhstan amounted to1943 m3 and correspondingly for
Kyrgyzstan – 1371 m3, Tajikistan – 1843 m3, Turkmenistan - 4044 m3 and
Uzbekistan - 2594 m3/per man/year.

Water resource management in the region is regulated by a number of Soviet and

post-Soviet documents. The Alma-Ata Agreement on cooperation on joint
management and protection of water resources (1992) and the Nukus Declaration
on the problems of sustainable development of the Aral Sea Basin (1995) are among
the vital ones. Being guided by “the Agreement between the Republic of Kazakhstan,
the Republic of Kyrgyzstan, the Republic of Uzbekistan, the Republic of Tajikistan
and Turkmenistan on the cooperation for the joint management and protection of
water resources” (February 18, 1992, Almaty), having respect for the established
structure and principles of water resource sharing, being based on active normative
documents the parties established on parity basis the Interstate Commission for
Water Coordination (ICWC) on the regulation, rational management and protection
of water resources of interstate sources as well as “Sirdarya” and “Amudarya” Basin
Water Management Associations (BWA).

At a later date, on March 17, 1998 the Agreement between the Governments of the
Republic of Kazakhstan, the Republic of Kyrgyzstan and the Republic of Uzbekistan
“On water resource management in Sirdarya River Basin” established the procedure
for the management of water and power resources in Sirdarya River Basin that
contributed to the ballasting of hydroeconomic and energy situation in Central Asia.
At the same time the Soviet Water-resources assessments still play the role of
recognized and agreed rules and procedures of joint water resource management in
the Aral Sea Basin.

The historical records of the aforementioned institutions suggest that with the
rational approach being provided within these institutions (ICWC, BWA) the
regional countries are able to overcome any problems in water management in the
Aral Sea Basin. It is important that these institutions are ready to contribute to
strengthening mutual trust among Central Asian countries.

3. Mutual Understanding and Cooperation Issue – Tajikistan is confronted with the

challenging problem of energy security, which could be resolved through the
implementation of hydroenergy projects. Recently, the intentions of the Republic of
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Tajikistan to complete the construction of the waterworks facilities that were

launched in late 1980s and the construction of new hydroelectric systems face
incomprehension and backset from some regional countries in Central Asia.

Via the internet and other mass media is being distributed an enormous mountain
of inauthentic information to demonstrate to the world community the alleged
“environmental consequences” of the waterworks facilities that are situated
upstream of the Sirdarya and Amudarya Rivers as the major cause for the
desiccation of the Aral Sea and menace to water availability for the economy and
environment of these countries. Bias on water consumption in the region prevails
fueling those who oppose hydroelectric development in Tajikistan; they pressurize
the situation regarding the construction of new waterworks facilities without any
ground and deliberately conceal the underlying cause for the Aral Sea catastrophe
and the water shortage in the downstream countries.

Given the peculiarity of the Central Asian landscape, the aridity of the region, natural
resources and irrigated lands, water allocation is a key factor of socio-economic
development and prosperity for Central Asian countries. Tajikistan and Kyrgyzstan
seek to boost their own development and to cover their critical energy shortage
through hydroelectric development while Uzbekistan, Turkmenistan and
Kazakhstan are interested in conservation and increase of the water intake quota
introduced once under the Soviet Union thus to satisfy their growing water
requirement for irrigation. As a result, a conflict of interests between upstream
countries – Tajikistan and Kyrgyzstan - on the one hand and the downstream
countries – Uzbekistan, Turkmenistan and Kazakhstan - on the other hand is being
aggravated.

The downstream countries have mainly complaints about the operating regime of
the hydropower facilities in the upstream countries. It is natural that reservoir
drawdown regulations as well as electric output in upstream countries may lead to
contradicting interests between irrigation and hydropower given the lack of
integration among the regional economies and absence of an appropriate legal basis
on water resource management.

However, we strongly believe that all problems can be settled through the
harmonization of existing documents, as well as through the working out of new
agreements, if only good will of the interested countries exists. Thus, individual
countries in Central Asia seek to transform the management of the Sirdarya and
Amudarya Rivers’ water resources into an international one and to pressure the
upstream countries and put an end to hydroelectric development in the upstream
countries. The downstream countries regardless of their obsolete and inefficient
irrigation technologies accuse the upstream countries of the attempt to get control
over the water resources through hydroelectric development, while community
health care, poverty reduction and ensuring the economic development mostly
guide the upstream countries seeking their own energy assurance.
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The history of the independence period of the Central Asian countries demonstrates
that Tajikistan has always been one of the major initiators of actions on rational,
efficient and integrated water management in the region. Numerous initiatives of
the President of the country as well as forums, international conferences, round
tables and other corresponding events that were held are the illustration of the
previously mentioned. In connection with one of these initiatives, the General
Assembly of the United Nations decided to organize a “High-level international
conference on the mid-term comprehensive review of the implementation of the
International Decade for Action 'Water for life' 2005-2015” to be held on 8-10 June
2010 in Dushanbe (http://waterconference2010.tj/). Thus, traditional water
relations are being artificially transformed into problems that create obstacles in
promising projects for hydroelectric developments in Tajikistan.

On January 1, 2010, neighboring Kazakhstan took on the chairmanship of the

Organization for security and Co-operation in Europe (OSCE). The OSCE is the
largest regional security organization in the world. The Organization deals
with three dimensions of security - the politico-military, the economic and
environmental, and the human dimension. What issues, important to
Tajikistan, would you like to see Kazakhstan address?

I think all three dimensions are very important to Tajikistan and we have to address
many problems in connection with the three dimensions you mentioned.

On the politico-military dimension - in Central Asia we have a lot of problems

dealing with global security such as: struggle against religious extremism, terrorism,
narco-trafficking, etc. In this context, Kazakhstan has announced that it was going to
work to pay greater attention to the needs of the Central Asia region with a focus on
Afghanistan, which is very actual and much needed.

On the economic and environmental dimension - several problems are very

important such as: the development of the transportation sector and of
transportation infrastructures; customs and trade procedures; energy and
environmental security; and migration. On the environmental front, the drying out
of the Aral Sea and melting of glaciers and snowcaps will need big attention.

On the human dimension - our country, like other countries in Central Asia, is in
transition period and we need improved legislation and operating mechanisms on
the issues of governmental structures, state structures, human rights & freedoms,
democracy, tolerance, intercultural dialogue, security of migrants, migration
problems, gender rights connected with human trafficking, rule of law, monitoring
of electoral processes, etc. These issues should be at the center of attention and we
think Kazakhstan will work on them and Tajikistan is keen to associate itself to
these efforts.
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We should mention that one of the problems impacting Tajikistan this year is
delivery of goods and transit of goods to the territory of Tajikistan. For example: as
of May 26, 2010 over 2500 wagons with cargo destined for Tajikistan and supposed
to transit through Uzbekistan are being held up in the latter, including 300 wagons
with cargo destined for NATO forces in Afghanistan. I believe this problem can be
addressed within the OSCE framework for a resolution. Uzbekistan’s mentions of
technical reasons and natural disasters which allegedly led to the detainment of
Tajikistan’s wagons in its territory do not stand up to criticism.

Tajikistan is not known as an oil & gas country, however, exploration is being
conducted and the company Tethys Petroleum was the first to sign a
production sharing agreement in Tajikistan. In August 2009 it even started
the appraisal of drilling operations on the Komsomolsk field that could
contain over 2 billion cubic meter of natural gas. Can you elaborate on the
latest oil & gas developments in Tajikistan?

In Tajikistan we now have several foreign companies in the area of exploration of oil
& gas. The biggest companies are Zarubezhneftegaz (subsidiary of Gazprom, Russia)
and Tethys Petroleum Tajikistan - that is a joint venture of Tethys Petroleum LTD,
Canada and Tajikistan - and other companies from countries such as Austria and
Switzerland. In December 2009 Tethys Petroleum Limited announced that it has
completed an initial independent reserve and resource report for its assets in
Tajikistan. These assets are held by Tethys' subsidiary Kulob Petroleum Limited,
which covers an area of some 34,751 km2 (8.6 million acres) in southwestern
Tajikistan. This is the first time a report has been commissioned for these assets
under the rules of Canadian National Instrument 51-101 and was carried out by the
UK based reserve auditing firm TRACS International .

Also you are right: 2.12 billion cubic meters of gas are estimated to be present in the
Komsomolsk deposit near Dushanbe and Tethys Petroleum is presently drilling
wells in that deposit. The latest data, recently published by the company Petroleum
Sugd, an Austrian-Tajik joint venture that operates in the Northern part of the
country, announced that they doubled production of gas and have very good results
on oil exploration. I regret to say that all these results are far behind from what we
achieved during the best years we had in the past: for example in 1973 and 1979 we
recovered 520 million m3of gas and 418,000 tons of oil.

Now we produce very small amounts, many times less than in the 1970s. We have a
lot of work ahead of us to recover. According to estimates from Tethys Petroleum:
Tajikistan has good prospects to produce enough oil & gas to cover its needs. But at
the present time we are pressed to look for the diversification of our import routes
for oil and gas to Tajikistan: there is an attractive idea for the construction of
pipelines connecting Tajikistan, Afghanistan, Turkmenistan and Uzbekistan, with
distribution center and gas storage capacities in Sheberghan (Afghanistan). In the
beginning the gas could be supplied through it to Afghanistan and Tajikistan. And in
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the future, when gas production in Tajikistan and Afghanistan will rise to export
volumes, the pipeline could work on in reverse to deliver excess gas to other
consumers. Considering recent data on hydrocarbon fuel in the depths of Tajikistan
and Afghanistan, we hope that investors will appear.

At the beginning of 2010, Tajikistan launched an ambitious program to

finance the completion of the Roghun hydropower dam project (HPP). Roghun
was originally conceived in Soviet days to generate 3,600 megawatts and is
seen today as the road to energy independence. A share purchase program
was launched whereby each Tajik by acquiring shares and certificates would
contribute to raising the six billion somoni (about $1.3 billion), which the
Tajik authorities estimate necessary to finish the project. Can you give us an
update on how much money has been raised, on what is happening, and on
what has and will happen with the money already collected?

You are right: we consider the Roghun Power Station as an instrument that can
provide us with not only energy security, but also with an economic and social
development. As you know the construction of Roghun HPP was begun in 1983 by
the Soviet Union Government and major underground and infrastructural works
were completed. The construction was disrupted due to the collapse of the Soviet
Union in 1991 and the start of the civil war that followed in 1992. During the
construction period, more than 70% of underground and infrastructural works
were completed and a dam was erected to 40 meters, but unfortunately, the 1993
flood damaged those completed works. Since 1998, the government resumed the
rehabilitation works at Roghun HPP to reach its level before the construction
stopover of 1991.

The construction of Roghun HPP is financed not only through the share purchase
program as you mentioned, but also through the government budget. The total cost
of the project would be more than $1.3 billion. In 2008 and 2009 about $150
million were allocated from the State Budget and it is expected that every year
through 2014 significant investments will be allocated from the government budget
to this project. According to information from our Ministry of Finance, the amount of
money collected through the selling of shares in the Roghun Power Station reached
in April 2010 813,740,000 somoni, which is about $185 million.

At a press conference held in Dushanbe on April 26, 2010, the Chairman of the
National Bank of Tajikistan Mr. Sharif Rahimzoda said that $16 million of this
amount is being used for the preparation of equipment for the Roghun Power
Station. We anticipate that by the end of the year, a total of $47 million will have
been allocated for the purchase of equipment. By end of next year $168 million will
have been spent on equipment.

The Government of Tajikistan has committed to ensure good governance,

transparency and required quality and safety of works during construction of
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Roghun HPP. Some concrete actions are: (i) the government has set up a
supervisory board and a public commission to oversee the financial management
and implementation of the project; (ii) the Government committed to conduct audits
of financial statements of Roghun OSJC by an international firm; (iii) the
Government is selecting 2 international firms to conduct a technical and economic
feasibility study and environmental and social assessment of Roghun HPP according
to the World Bank’s procedures; (iv) all necessary information, reports and audit
results will be disclosed to the public; (v) the Government is working on the
appointment of an experienced international engineer to further ensure high quality
and safety of construction works at Roghun’s site according to the best international
practice.

Of course, there will be several payment stages and the use of this money will be
monitored and the people who are shareholders in this project will be duly
informed. These payment stages are interrelated with the different construction
stages. The first stage assumes the mounting of two initial hydroelectric generators
that will work with a lower level of water, about 70 meters. The two first generators
will generate 800 megawatts at most. At full capacity, each final generator will
generate 600 megawatts.

The Roghun project is facing multiple challenges: downstream countries,

notably Uzbekistan, are vigorously opposing the Roghun project, multilateral
organizations are waiting for feasibility and environmental impact studies to
be completed before getting fully involved, being a land-locked country
Tajikistan may see the cost of importing needed supplies and equipment
skyrocket beyond budget, etc. In this context, what are Tajikistan’s options if it
cannot raise all the needed money and gather all the international support it
needs to complete this project?

As I mentioned earlier unfortunately the huge regional benefits of the Roghun

project are ignored by some, and the project has largely been politicized. We hope
that these benefits will be key focus, not a political factor. It is important to
underscore that Tajikistan, about three years ago, asked the World Bank about
feasibility and environmental impact studies with the purpose to eliminate all kinds
of concerns about the negative impact of the project and to attract international
investments to continue and finish the construction of Roghun HPP.

On March 10 of this year, the World Bank announced that it would provide financing
for these feasibility and environmental impact studies and an international bid was
announced. Now there is a shortlist of ten companies interested in conducting these
studies:
 (Technical and economical):
o WS Atkins (UK);
o ELC-Electroconsult (Italy)-Coyne et Bellier (France)-IPA Energy
Water Consulting (UK);
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o SNC-Lavalin Group Inc.;

o Mott Mac Donald (UK)-Temelsu International Engineering Services
Inc. (Turkey);
o Nippon Koei Co Ltd. (Japan);
o EDF (France)-Fichtner (Germany)-Stocky Engineering (Switzerland).
 (Socio-ecological):
o Foster Wheeler/Battler (US);
o Golder Associates Ltd (Japan);
o Sterling International Group Inc. (US);
o Poyry Energy Ltd. (Switzerland).

By the end of May or June, two will be chosen from these ten, to make these
assessments. Within 12 to 18 months these companies must complete their work
and we hope to have positive results. The World Bank announced its readiness to
further cooperate to create an international consortium of financiers for the
construction of the Roghun Power Station subject to the positive results of these
assessments. In the meantime, Tajikistan will continue its rehabilitation efforts to
reach 1991 level in alignment with these studies for which both the World Bank and
the IMF are supportive.

We hope that we will successfully attract necessary money to finance the project.
The construction of the Roghun Power Plant will consist of several stages. As I
mentioned before 1st stage is the implementation of 2 generators of 400 megawatts
capacity each. According to our assessment we need $800 million to finish the first
stage. It is worth to emphasize that almost all the equipment for the two initial
hydroelectric generators was delivered to the Roghun HPP construction area before
the collapse of the USSR and were expected to be online in 1993.

We have very good international support for building Roghun HPP both by
multilateral development banks and countries. At this juncture, we are greatly
thankful to the World Bank, the International Monetary Fund, the Asian
Development Bank, and other development partners and countries for their
support. To make sure we obtain all support needed for this project, we will work
closely with the World Bank to have positive results, including, if necessary, proper
adjustments to the project.

Like many poor countries, Tajikistan would greatly benefit from foreign direct
investment, notably to build small & medium-sized hydropower plants, to
conduct oil & gas exploration and to develop the use of renewable energies.
Legislation has even been passed to enable the use of a Production Sharing
Contract. Can you shed some light on how potential investors should proceed
to take advantage of the opportunities Tajikistan has to offer?

I have to say that Tajikistan is very open and flexible. Tajikistan in cooperation with
foreign investors uses several mechanisms of cooperation such as concessions,
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share emissions, Build-Operate-Transfer (BOT) contracts, and Production Sharing

Contracts (PSC).

Let me give you a few examples in the energy sector:

- You mentioned the Production Sharing Contract now used with Tethys
Petroleum: several amendments in the tax code, customs code and civil code were
passed to make the possible this PSC. We are ready to make necessary amendments
in our laws in order to facilitate international cooperation and attract foreign direct
investment to our economy.

- We have 25-year concession between Tajikistan and the Aga Khan Development
Network for the production of electricity in the Pamir region through the company
Pamir Energy that operates the concession.

- For share emission, we have the example of Sangtuda-1 a hydropower plant where
75% is owned by the Russian federal energy-holding group RAO UES and 25% by
the Tajik state electricity company Barki Tojik.

- Sangtuda 2 is under construction using Iranian investment through a BOT

contract. Once the construction is over, the Iranian investor will generate and sell
electricity, make money and after 12.5 years will transfer the hydropower plant
back to Tajikistan.

There are also similar examples of cooperation in other sectors: the EBRD and the
IFC have shares in several banks. The Aga Khan Development Network created
several years ago the First Microfinance Bank of Tajikistan, German investments led
to the launch during the summer of 2009 of Access Bank, which specializes in
expanding access to finance for micro, small and medium enterprises. The
hospitality industry has seen Turkish and Russian investments in hotels and the
mining sector drew Canadian, Chinese and Kazakh investments. Investors from
China, EU, Russia, US have significant share in the telecommunication sector.

We try to use all types of cooperation recognized internationally in order to attract

investors to Tajikistan. We also have tax exemptions depending on the size of
investment and on the implementation of modern technologies. Significant efforts
are undertaken to improve the business climate. Tajikistan was included in the list
of “Top Ten Reformers” in the World Bank Survey “Doing Business 2010”. In 2008 a
Consultative Council on the improvement of the investment climate was created
under the President of the Republic of Tajikistan, which consists of representatives
of business society and entrepreneurship of the country. Every six months the
Consultative Council meets with the participation of President Emomali Rahmon.
The “200 days of reform” program started at the end of 2008 and it introduced
many good changes in the business environment and it defined priority directions
for the improvement of business activities. In August 2009 was introduced the “One-
stop-shop” principle for the registration of newly established enterprises. We are
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working on the development of the one-window concept customs procedure dealing

with the delivery of goods. Last, we have free capital inflow & outflow and a floating
exchange rate.

We appreciate the cooperation and support of international community, especially,

UNDP, World Bank, ADB, US (USAID) and EU on the development of regulatory basis
of business climate of Tajikistan

Tajikistan suffers from chronic and debilitating electricity shortages. At a time

where solar energy is growing popular as a clean energy requiring minimum
investments, does Tajikistan have any legislation, such as feed-in-tariffs,
facilitating the development of clean energy in Tajikistan and how could
foreign manufacturers of solar panels gain a foothold in the Tajik market?

We do not have feed-in-tariffs but in January 12, 2010 under the number 587 was
approved the Law Of The Republic of Tajikistan On The Use Of Renewable Energy
Sources. Also, last year The Renewable Energy Association of Tajikistan was created
to deal with the implementation of production of clean energy such as solar.

For Tajikistan, solar energy is promising because we have many sunny days and we
can use it in remote places in Tajikistan as we have a very difficult landscape in
Tajikistan.

Last year in November 2009, a conference was held in Dushanbe: ““Renewable

Energy in Central Asia: Creating Economic Sustainability to Solve Socio-Economic
Challenges.” The conference, in cooperation with the Tajik government was
organized by prominent organizations such as the Carnegie Endowment for
international Peace, Joint Stock Company SystemAvtomatika (Tajikistan),
Renewable Energy Association of Tajikistan and the Asian Development Bank’s
CAREC program (Central Asia Regional Economic Cooperation). The conference
started with opening remarks of Sherali Gul, Minister of Energy and Industry of
Tajikistan and U.S. ambassador Kenneth E. Gross. Meanwhile, I have to say that we
are just at the beginning of the use of renewable energy like solar and wind, but
there is significant interest. Last year in the Sogd region an exhibit was held on the
use of solar energy and there are examples of use of solar energy such as in
hospitals and schools and even in some private houses.

The problem of tariffs in Tajikistan is a very actual problem because of the

importance of profitability when producing energy coupled with the need to adjust
to international tariffs. Tajikistan cooperates with the World Bank on projects to
decrease energy losses and to elaborate new tariffs for electricity.
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Tajikistan has close historic, cultural and ethnic ties with Afghanistan. What
are the collaboration agreements concluded with Afghanistan, notably in the
energy sector?

Tajikistan cooperates with Tajikistan and despite our energy shortages, in the
summertime we do have extra energy and we have agreements to deliver it to
Afghanistan through existing energy transmission routes.

Together with Afghanistan, Pakistan, Kyrgyzstan and Tajikistan we signed the

agreement on the development of an energy transmission project for Central Asia –
Southern Asia-1000 (or CASA-1000). The regional project CASA-1000 provides for
the building of high voltage transmission lines from Kyrgyzstan and Tajikistan to
Pakistan via Afghanistan. The Tajik Parliament ratified this agreement in 2009.

We are finishing construction of a new electricity transmission line with 220KV

capacity from Sangtuda 1 HPP (Tajikistan) to Panji Poyon (Tajikistan) on the right
bank of frontier river Panj. This line will be connected across the river to the
transmission line of same capacity, which is being under construction between
Sherkhan Bandar (Afghanistan) and Puli Khumri (Afghanistan). Conclusion of
construction is planned in August 2010.

We are exploring ways to enhance cooperation, such as in the gas sector. We also
have cooperation agreements beyond energy with Afghanistan such as for
transportation and cross border trade, cooperation with border troops, in anti-
narcotic struggle, on cultural and education areas.

How have the recent events in Kyrgyzstan impacted your country and could
similar events happen in Tajikistan?

I am confident this kind of calamity cannot happen in Tajikistan because we already

had learned a very bitter lesson during a devastating civil war that lasted from 1992
to 1997. We produced a lot of damages to our people, economy and social sector and
we still feel their effects. Because of this, the people of Tajikistan value the price of
sustainability, peaceful life, so we have some “immunity” for which we paid too
expensive price.

For Kyrgyzstan we regret such developments. Our two people have warm fraternal
relations to each other and we sincerely hope the situation will stabilize and the
national concord achieved.