The World Bank’s Board of Executive Directors has approved additional grant financing of $65 million in support of the second phase of the 3 GW Nurek Hydropower Rehabilitation Project, which will contribute toward more reliable electricity supply and expansion of renewable energy exports in Tajikistan.
“The World Bank is committed to supporting Tajikistan’s energy sector, given the country’s considerable potential in hydropower generation and export of clean, renewable energy resources,” said Ozan Sevimli, World Bank country manager in Tajikistan. “Investments in the Nurek hydropower plant – the mainstay of the country’s energy system – are essential in ensuring stable and reliable electricity supply for households and businesses domestically, as well as increased revenues from export at the regional market.”
The first phase of the Nurek Hydropower Rehabilitation Project — financed by the World Bank with $225.7 million, the Asian Infrastructure Investment Bank (AIIB) with $60 million and the Eurasian Development Bank (EaDB) with $40 million — was launched in March 2019. It supports the rehabilitation of three of the nine generating units and the key infrastructural components of the power plant; replacement of six autotransformers; enhancement of dam safety to protect the facility from seismic hazards and floods; and technical assistance to strengthen operational, technical and financial management capacity of the utility company Barqi Tojik.
The project’s second phase, financed by the World Bank ($50 million approved in June 2020), supports the rehabilitation of the remaining six generating units, the Nurek bridge, the powerhouse and other key buildings, while also strengthening the capacity of the hydropower plant to effectively maintain the plant’s operations.
The additional financing of $65 million is intended to reduce the financing gap of $164 million for the second phase of the project. The remaining gap is expected be covered by other potential co-financiers, including reallocation of savings from the EaDB and AIIB resources allocated for the first phase of the project. The total World Bank investment for this project amounts to $341 million.
The Nurek hydropower project generates about 50% of total annual energy demand in Tajikistan and supplies most of the energy for exports. Due to technical problems, the plant’s initial installed capacity of 3 GW has dropped to 2.32 GW over the past four decades. The facility is undergoing its first major rehabilitation since its commissioning in 1972 to 1979. Once completed, the rehabilitation will increase the capacity to 3.214 GW, which will ensure improved electricity supply during the cold winter months and bringing much-needed revenues from expanded electricity exports during the summer months.
The rehabilitation will also ensure dam safety improvement measures, which will help lower operational and maintenance costs. Lastly, the project will generate global environmental and climate mitigation benefits in the form of net reduction of CO2 emissions, leading to 69 million tCO2e net reduction in emissions versus the baseline during the project’s economic life, according to the World Bank.
