Pamir Private Power Project, Tajikistan

Challenge:

The Eastern part of Tajikistan in Central Asia suffered severe outages of power throughout the day causing huge inconvenience to government, businesses and social services. People were too poor to pay for electricity at market prices and there was no incentive for companies to take on the challenge of providing services to remote areas of the country

Solution:

The Pamir Private Power project worked to restore a reliable electricity supply to the poor and isolated inhabitants of Eastern Tajikistan. The Project was designed to contribute to Tajikistan’s poverty reduction strategy by providing basic services, as well as supporting economic growth

Under a 25-year concession agreement a privately owned SPV was responsible for all existing electricity generation, transmission and distribution facilities, where the Government of Tajikistan remained as the principal owner of all physical assets

The financing mix was 45 per cent through equity and 55 per cent debt, which was provided by the IFC and the International Development Association (IDA). IFC provided US$ 3.5 million in equity financing, the remainder US$ 8.2 million was provided by the Aga Khan Fund for Economic Development

A very important component of the Project was the social protection scheme under which households (which account for 98 per cent of all consumers) pay reduced tariffs consistent with their standard of living

SDG Impact:

SDG 3: Contributing to the well-being of poor people in rural areas without power and now medical facilities have started to offer advanced services (eHealth)

SDG 7: Affordable and clean energy, ending power outages, ensuring 24 hours and seven days a week supply, to even the most remote areas in the country, and providing power to 226,000 people in the Eastern Tajikistan and 28,500 in the Northern Afghanistan

SDG 9:Innovation on the business model and economic scheme, extending the PPP framework in the country and also to Northern Afghanistan; and

SDG 17: Partnerships between key stakeholders, with core support by multilateral banks

Compliance with UNECE People-first PPP criteria:

The Project:

  • Improved access to essential services (especially groups underserved) and targeted equity and social justice;
  • Boosted prosperity through effectiveness of economic projects; and
  • Can be easily replicated and scaled up to achieve the transformation impact required by the 2030 Agenda