DUSHANBE, November 17, 2014, Asia-Plus -- Tajikistan is expected to grant tax privileges to Sangtuda-1 and Sangtuda-2 hydroelectric power plants (HPPs).

The government has reportedly submitted amendments proposed to the country’s law on the national budget for 2014 for consideration to the parliament.

An official source at the Majlisi Namoyandagon (Tajikistan’s lower chamber of parliament) Committee on Finance and Economy says the government proposes to exempt the Sangtuda-1 and Sangtuda-2 HPPs from paying value added tax (VAT) and customs duties on equipment delivered to the country for them.

As of the end of October, Barqi Tojik (the state-owned utility responsible for generation, transmission, and distribution of electricity in Tajikistan) reportedly owed some 200 million somoni (equivalent to some 40 million U.S. dollars) to OJSC Sangtudinskaya GES-1, which operates the Sangtuda-1 HPPP.

The Sangtuda-1 HPP, consisting of four units with total capacity of 670 MW, was officially commissioned on July 31, 2009.

The construction of the Sangtuda-1 hydropower plant located some 110 kilometers southeast of Dushanbe began in the late 1980s.  By the early 1990s, only 20% of the construction work had been completed, and further construction was suspended due to a civil war that broke out in Tajikistan in the early 1990s.  The talks between Russia and Tajikistan on completing the construction of Sangtuda-1 HPP began in 2003 and in 2004 the parties signed an inter-governmental agreement.

Russian-Tajik OJSC Sangtudinskaya GES-1 was established to complete the construction of the Santuda-1 power plant.  Russia’s Inter RAO YeES and the Ministry of Energy and Industries of Tajikistan signed an agreement on the establishment of the company in Dushanbe on February 16, 2005.  Russia owns 75% percent of the shares minus one share and Tajikistan assumes the 25% ownership interest plus one share in Sangtudinskaya GES-1.

As far as the Sangtud-2 HPP is concerned, construction of this plant also commenced during the Soviet period in the 1980s, but halted in the beginning of the 1990s due to lack of financing.  In 1995, Iran expressed interest in helping to finish the project, but an agreement was not signed until 2005.  Construction of Sangtuda-2, a 220-megawatt plant on the Vakhsh River, officially commenced in February 2006.  It is located some 120 kilometers southeast of Dushanbe.

The power plant has been built by Iranian company Sangab.  The turnkey contractor was International Farab Co.  The project was consulted by Mahab Ghods Engineering Company and the subcontractor was Omran Maroon Engineers Company.

At first it was supposed that Iran, which has put some 180 million U.S. dollars into the construction of the hydropower station, will operate it for the next 12½ years and then transfer control to Tajikistan, whose contribution to the construction costs amounted to around 40 million U.S. dollars.

But Tajikistan has reportedly extended the period of operation of the Sangtuda-2 hydroelectric power plant (HPP) for Iran by two years.  According to some sources, an agreement on extension of the period of operation of the Sangtuda-2 HPP for Iran by two years was signed in Dushanbe on September 10, during Iranian President Hassan Rouhani’s visit to Tajikistan.