Qairokkum Hydro Power Rehabilitation Project

Country | Tajikistan

Region | Asia

SECTOR | energy

QII Principles | Principle 1: Sustainable Growth & Development, Principle 3: Environmental Considerations, Principle 4: Building Resilience, Principle 5: Social Considerations

QII Sub-Principles | 1: SDGs, 1: Paris Agreement, 1: Wider economic benefits, 2: Value for money analysis, 2: Life-cycle costing, 2: Operation and maintenance, 2: Technological innovation, 2: Risk management, 3: Environmental Impact Assessment, 3: Environmental Impact Mitigation, 3: Biodiversity, 3: Climate, 3: Weather, 3: Emissions, 4: Resilience, 5: Social Impact Assessment, 5: Capacity and institutional building, 5: Gender, 6: Growth & development strategies, 6: Procurement transparency, 6: Policy

Overview

Cost: USD 201 million

Phase I: Up to US$ 50 million sovereign-guaranteed loan to Barki Tojik for Phase I of the rehabilitation. Phase I is co-financed with funds from the Pilot Program for Climate Resilience. This co-financing includes a US$ 11 million grant and a US$ 10 million concessional loan.

Phase II: Up to US$ 38 million sovereign loan (on lent to Barki Tojik) for Phase II of the rehabilitation. Phase II is co-financed with funds from the Green Climate Fund. This co-financing includes a US$ 23 million grant and a US$27 million concessional loan. The European Investment Bank also provided an up to US$ 38 million sovereign loan.

Parties involved (public and private):

Ministry of Energy and Water Resources and Barki Tojik Open Stock Holding Company (national energy company) is a 100% state owned vertically integrated power utility responsible for generation, transmission and distribution of electricity in Tajikistan.

Relevant contractual details (type, length etc.): Contract signed on 20 December 2018. Contract duration: 81 months (57 + 24 months)

Contractor: JV GE Hydro (France), GE Renewables (Switzerland) and Cobra Instalaciones y Servicios S.A. (Spain).

Context: Tajikistan is the most vulnerable country to climate change in the Europe & Central Asia (ECA) region. Its energy system is dominated by hydropower and is therefore highly exposed to climate change risks. Hydropower is of fundamental importance for economic development and living standards in Tajikistan, and climate change is a hugely important risk amplifier in this already precarious and challenging context. Strengthened governance and institutions are necessary to improve the climate resilience of hydropower systems. Additionally, the climate vulnerability of Tajikistan's energy systems also has important social and gender dimensions.

Aim(s) of the project:

• Increase the installed capacity from 126MW to 174MW by installing new turbines;
• Prevent unnecessary discharge of water through spillways and allow generation of more electricity with the same flow of water;
• Raise the safety level of the power plant and the dam;
• Strengthen the power plant's resilience to the expected impacts of climate change through continued physical upgrades designed to take into account projected increases in climatic and hydrological variability.

Timeline

Contract signature date: 20 December 2018 (57 months for completion)

Benefits

Highlights and Expected and realised benefits:

• To increase the adoption of best international practices in the assessment and management of climate change risks to hydropower operations by Tajik hydropower operators and other associated agencies such as providers of hydromet services (Phase I+II);
• To develop institutional capacities and structures needed to ensure effective transboundary management of hydropower cascades in order to promote the climate resilience of hydropower operations (Phase II); and
• To scale up the integration of climate resilience approaches, technologies and design standards into a strategic hydropower facility with a powerful demonstration impact (Phase I + II).

Metrics

The Project will have three complementary components with targeted project outputs as described below:

• Output 1: Increasing the adoption of international best practices in climate risk management in the hydropower sector.
• Output 2: Develop institutional capacities and structures for effective transboundary management of hydropower cascades.
• Output 3: Scale up the integration of climate resilience measures into a strategic hydropower facility (Qairokkum HPP) with high demonstration impact across the sector

Name of Institution

European Bank for Reconstruction and Development