The Government of Tajikistan wants to review the agreement signed with the Government of Russia o payment of electricity generated by the Sanfgtuda-1 hydroelectric power plant (HPP) as it wants to pay for electricity generated by the Sangtuda-1 HPP in Russian rubles.  

This is one of the points of the Plan of Actions to Prevent the Impact of Possible Risks on the National Economy, which was adopted by the Tajik Government on March 18, 2022.  

Recall, Russian President Vladimir Putin signed a decree on March 31, 2022 requiring foreign buyers to pay rubles for Russian gas from April 1 or see their contracts halted.    

Meanwhile, in accordance with the government-to-government agreement between Tajikistan and Russia on cooperation in the operation of the Sangtuda-1 HPP, Tajikistan pays for electricity generated by this hydropower plant in dollars.  

Initially, the rate was set at US$0.0169 per 1 kWh (VAT not included).  Since 2010, the agreement has provided for annual 4-percent increase in the rate for the domestic market of Tajikistan.

The only buyer of the electricity generated by the Sangtuda-1 HPP is Barqi Tojik (Tajikistan’s national power utility company).  

Meanwhile, Open Joint-Stock Company (OJSC) Sangtudinskaya GES-1, which operates the Sangtuda-1 HPP, seeks an opportunity to sell electricity generated by the Sangtuda-1 HPP by itself.

The company has repeatedly raised the issue of increasing the supply of electricity generated by the Sangtuda-1 HPP and independently exporting it at different levels.

A representative of OJSC Sangtudinskaya GES-1 told Asia-Plus in an interview that according to the agreements concluded, the company has the right “to sell electricity generated by the Sangtuda-1 HPP in accordance with direct contracts and export it by itself.”   

These rights are reportedly enshrined in a government-to-government agreement between Tajikistan and Russia on a procedure and conditions for joint participation in construction of the Sangtuda-1 HPP and in a government-to-government agreement in the operation of this hydropower plant.

According to OJSC Sangtudinskaya GES-1, Barqi Tojik’s debt for electricity generated by the Sangtuda-1 HPP has amounted to about 2.262 billion somonis (equivalent to more than 180 million U.S. dollars) as of April 1, 2022.     

Last year, an average rate of payment for the supplied electricity reportedly not exceeded 38 percent, which is the lowest rate in the history of the hydropower plant’s operation.  

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 the 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.

The Sangtuda-1 HPP was officially commissioned on July 31, 2009.  The plant now reportedly provides around 15% of Tajikistan’s electricity output.