Russia's participation in the construction of hydropower plants in Tajikistan



The article discusses Russia's participation in the development of the hydropower sector of Tajikistan, in the framework of relations with all States of the Central Asian region. The author analyzes the history of Russia's participation in the construction of hydroelectric power plants in Tajikistan, considers the political consequences of the signing of agreements on the construction of hydroelectric power plants between these countries, leading to a weakening of Tajikistan's energy sovereignty, and proposes a strategy for the returning of Tajikistan’s energy sovereignty. In addition, the article also analyzes the reactions and actions of other Central Asian countries on the negotiation processes of Russia with Tajikistan and Kyrgyzstan for the construction of hydroelectric power plants.

Keywords: water resources, hydropower, HPP, Tajikistan, Russia, Central Asia.

The Republic of Tajikistan is a state in Central Asia, which gained its independence from the USSR on September 9, 1991. Its territory is 143,100 km² and 94.1 % of its territory is occupied by mountains [1]. The country has almost no hydrocarbon resources, but is rich in other minerals: precious stones, uranium, gold, coal, aluminum and polymetallic ores [1]. One of the main riches of the Republic is its water resources — 64 percent of the water resources of the Central Asian region are forming in the country, so Tajikistan has great hydropower potential. Unfortunately, Tajikistan is not able to independently develop its hydropower potential, and needs funding from both its international partners and international organizations. The Russian Federation is considered one of the main partners of Tajikistan in the international arena. Tajikistan and Russia officially call each other ‘the strategic partners’ because in the first half of the 90s they signed an agreement on allied cooperation, oriented to the XXI century [2]. Russia from the very beginning of establishing diplomatic relations with Tajikistan, showed its interest in Tajik hydropower projects, and signed agreements with Tajikistan for the construction of hydroelectric power plants. For example, on 13 April 1994, the governments of Tajikistan and Russia signed an agreement “on the completion of the Rogun HPP on the Vashkh River in the Republic of Tajikistan” [3]. 10 years later, on 16 October 2004, Russia and Tajikistan signed the intergovernmental agreement «on the procedure and conditions of the share participation of the Russian Federation in the construction of HPP Sangtuda-1" and the construction was completed in 2009 [3]. Another document, also signed in 2004, was the agreement between the Russian company “Russian aluminum” (RUSAL) and the Government of the Republic of Tajikistan «on the completion of the Rogun HPP» [4]. However, later the parties could not come to a common opinion on some issues of construction of Rogun HPP and the Government of Tajikistan unilaterally terminated the agreement with RUSAL in 2007. Despite this, to not to lose this project, Russia offered some new conditions for the completion of the Rogun HPP, and showed (and still shows) its interest in participating in the CASA-1000 energy project.

Not only the heads of states, but also the majority of researchers and scientists dealing with the Russia’s role on the development of the hydropower potential of Tajikistan argue that the actions of the ‘strategic partner’ of Tajikistan meets the «allied spirit», and all its actions are exclusively aimed to the development of this Central Asian Republic. From our side, we want to ask the following question: Is Russia's actions aimed at the development of the Tajik hydropower potential? We can find the answer in the history of Russian external policy in the Central Asian region and history of bilateral relations between Tajikistan and Russia after the USSR collapse.

It is not secret that after the self-dissolution of the Soviet Union in 1991, the Russian Federation turned its gaze towards Europe. The former Soviet republics (with the exception of Belarus and Ukraine) were not included in Russia's foreign policy priorities. Nevertheless, Russia still had some relations with the countries of the Central Asian region. The former Soviet Central Asian republics were still using Soviet and Russian rubles as a national means of payment until the end of 1993, but then, within six months, they switched to national rubles (for example, the settlement rubles of the Republic of Kazakhstan). Tajikistan was the only country that used the Russian ruble as a national currency until May 1995, and only then the another national currency was introduced — the Tajik ruble. The existence of the ruble zone still closely connected Russia with the former Soviet republics of the ‘problem’ region, where the countries suffered from an economic recession, and there was a civil war in Tajikistan. To get to rid of this connection and move exclusively to ‘independent’ relations, economic reforms were carried out (which are also called ‘Gaidar’ reforms). As a result, until the end of the 90-ies all the countries of the Central Asian region were pushed out of the ruble zone. Nevertheless, to not to lose the region completely, from time to time Russia was signing some agreements with the countries of the region, but these agreements remained on papers. For example, the Russia's promise to include Tajikistan to the ruble zone. After this promise, Tajikistan ‘until the end refrained from introducing its own currency’ [5] continuing to use the Soviet ruble, the Russian ruble, and even introduced the Tajik ruble in the hope of joining the ruble zone. However, Tajikistan had to introduce its own national currency — Somoni, on 30 October 2000.

Realizing the failure of attempts to rapprochement with Europe, Russia turned back its attention to the entire post-Soviet space at the beginning of the new century. In the Central Asian region, Russia faced an unpleasant reality: the countries of the region struggled to cope with their domestic and intra-regional problems; however, these countries no longer considered Russia as the main and only strategic partner. They were actively developing their relations with European countries, China, the United States of America, as well as with international organizations in which they were looking for a replacement for Russia. Tajikistan was an exception. The country was recovering its economy and infrastructure after a long civil war, and therefore needed any economic support. At that time loyal to Russia the government of Tajikistan was still considering its strategic partner as the most important partner they can trust. Numerous signed agreements with Russia, which could not be implemented during the civil war, were waiting to be implemented now.

The biggest problem, which Tajikistan was not able to solve on its own, was the shortage of electricity throughout the country, especially in wintertime, when there was a limit on electricity even in the capital of the country — Dushanbe. The following obstacles stood in the way of solving this problem:

– the lack of economic opportunities;

– the lack of technical capabilities;

– the lack of relevant professional staff;

– disagreements on the use of transboundary water resources with neighbours in the region.

In particular, the main problems in the region are still the use of water and energy resources of Central Asia. During the Soviet Union, water and energy resources of the region were used as follows: under the control of Moscow, in the wintertime the upstream countries (Kyrgyzstan and Tajikistan) instead of using their water resources to generate electricity, were saving it, and in the summertime were lowering to the downstream countries (Kazakhstan, Turkmenistan, Uzbekistan) for irrigation of their lands. In return, the downstream countries compensated the upstream countries for the lack of electricity in the winter period (by electricity from thermal power plants and gas). With the collapse of the USSR, the downstream countries (particularly Uzbekistan) ceased to compensate Tajikistan and Kyrgyzstan for the lack of electricity in the wintertime, forcing them to transfer their hydroelectric power plants from irrigation to energy regime. The use of water by upstream countries in wintertime for electricity generation resulted the flooding of several territories of Uzbekistan and Kazakhstan, and the accumulation of water by upstream countries in summertime led to a shortage of water for irrigation in downstream countries. It can be said that the downstream countries ‘shot themselves in the foot’. For Tajikistan, the use of water resources in the wintertime to generate electricity was not enough to provide it to the whole country. It forced the country to continue the construction of HPPs, the constructions of which were started in the Soviet time and suspended after its collapse. Russia, as the main strategic partner (and successor of the USSR), was offered to help in the completion of the Sangtuda and Rogun HPPs constructions. Russia had responded to the request for assistance from the young independent Republic and agreements had been signed between them in 2004.

The continuation of the HPP Sangtuda-1 construction was started in 2005 (the construction itself began before the collapse of the USSR) and completed in 2009. Russia spent about $ 500 million on the construction, and in return demanded (and received) 75 % of the shares [6]. The authorities of Tajikistan were confident in the reliability and honesty of its strategic partner, who would not encroach on the energy independence of the country with a controlling stake, and therefore agreed to the terms of Russia. Despite the fact that the ownership of 75 % of the shares suggests that only Russia will dictate the terms of sale of electricity generated at this HPP, the Tajik authorities said that the HPP Sangtuda-1 ‘is a great achievement of economic policy’ [6]. However, the reality was that Tajikistan received a hydroelectric power station, which nor contributes to economic growth and nor produces significant electricity. In return for this HPP, Tajikistan partially sacrificed its energy sovereignty and transferred the ownership the Optoelectronic complex «Okno» (optoelectronic node «Nurek») to Russia [7], which provides its aerospace defense.

The fact that giving to Russia 75 % of the shares of HPP Sangtuda-1 was a fatal mistake, the Tajik government realized immediately, but they felt it in 2013. In February 2013, the management of Sangtuda-1 threatened to ‘stop operations on unpaid accounts in the amount of more than $ 66 million’ [8]. After this threat, Tajik parliamentarians were actively debating whether Tajikistan (having 25 percent of the HPP shares) has the right to use one of the four units.

Another agreement, which was aimed at developing Tajikistan's hydropower potential, was an agreement to complete the construction of the world's largest hydroelectric power plant, the Rogun HPP. This agreement was signed with Russia in 1994, but it was denounced [9] by Tajikistan, as it did not go beyond the paper. Concrete measures began to be taken in 2004, after the signing of a new agreement on the completion of the Rogun HPP construction between the Government of Tajikistan and the RUSAL. Such Russian active assistance to Tajikistan in the development of its hydropower sector was strongly disliked by the countries of the lower reaches of Central Asia. Taking advantage of the situation, in order to please both Tajikistan and other countries of the region, Russia, represented by RUSAL, conducted a feasibility study and introduced new conditions for the continuing construction of the Rogun HPP. The new conditions required that the height of the hydroelectric power station should be reduced from 335 meters to 285 meters, and the type of dam should be concrete. Later, RUSAL admitted that the original type of bulk dam is more reliable and safe, but insisted on reducing the height of the dam. The new conditions were put forward because Russia found a chance to return the loyalty of Central Asian countries if it could solve the water conflict between them. As we have already said, almost all Central Asian countries have ceased to see Russia as their main strategic partner, and Uzbekistan suspended its participation in the Collective Security Treaty Organization (CSTO) back in 1999.

The new requirements did not suit Tajikistan, as in exchange for the construction of the Rogun HPP, the Russian company RUSAL wanted to purchase 51 % of the shares of this HPP, as well as to privatize the Tajik aluminum plant, having previously upgraded and increased its capacity [10]. Having a negative experience in signing a failed agreement on the construction of HPP Sangtuda-1, Tajikistan in 2007 unilaterally denounced the agreement with RUSAL [11] and accused Russia of defending the interests of neighbouring Uzbekistan. Attempts to regain the loyalty of the rest of the Central Asian countries by Russia led to the loss of a major project in the region, which would allow almost complete control of the energy sector of Tajikistan. In order to save the project, Russia immediately began to offer alternative options for completing the construction of the Rogun HPP:

– to replace RUSAL with Inter RAO EES, which is engaged in the construction of Sangtuda HPP-1;

– a new draft of an intergovernmental agreement on the completion of the Rogun HPP, which leads that 75 % of the shares should belong to Russia [12].

The authorities of Tajikistan decided that it would be more reasonable to create a financial consortium for the completion of the Rogun HPP with the support of the World Bank, as well as with the help of the international community. After the creation of the financial consortium, Russia was invited by Tajik Government to participate in the completion of the Rogun HPP together with the international community. However, Russia didn't want to be a part of an international consortium, beacause «it is not interesting to have 25 % in the project since it will not give any influence on the work of the station» [13].

Uzbekistan didn’t like that Russia began negotiations on completion of the Rogun HPP and offered to Tajikistan alternative options, and suspended its participation in the Eurasian economic community (EurAsEC). This was another choice for Russia: to completely abandon participation in the construction of the Rogun HPP and return Uzbekistan to the EurAsEC or lose influence in Uzbekistan, but continue to strengthen it in Tajikistan? For the Russian President Dmitrii Medvedev, the choice was obvious — it was clear that the Tajik leadership would no longer sacrifice the sovereignty of its state solely in favour of Russia, and therefore it was decided to strengthen relations with Uzbekistan, the only disloyal country in the region. The first step was a public statement of Russia's support for Uzbekistan's claims against the construction of HPPs in Tajikistan and Kyrgyzstan. In January 2009, Medvedev visited Uzbekistan and said that his country would refrain from participating in hydropower projects that were not coordinated with all countries of the region [14]. Medvedev's statement contradicted all the signed Russian-Tajik agreements on the development of Tajikistan's hydropower potential and in protest at the Russian leader's statement, Tajik President Emomali Rahmon cancelled his official visit to Moscow.

Having lost a profitable hydropower project in Tajikistan, Russia has relied on the construction of hydropower plants in Kyrgyzstan, which also has large hydropower resources. The following month, after Medvedev's statement about Russia's non-participation in the construction of hydroelectric power plants, «uncoordinated with all the countries of the region», Russian government contrary to the statement of its leader, allocated Kyrgyzstan two-billion loan for the construction of the Kambarata hydroelectric power plant [14] which Uzbekistan also opposes. After that, it became clear that support for Uzbekistan's position against the construction of the Rogun HPP was only a geopolitical decision by Moscow to maintain its influence in the region. The then President of Uzbekistan Islam Karimov did not like to be a «chess figure» in the geopolitical games of Russia, and in response, addressing his neighbours, he proposed to consider the issue of regional integration without the participation of other, non-regional States (i.e. Russia) pursuing their interests. In other words, Russia, trying to gain benefits from the water conflicts of the Central Asian region, has spoiled its relationship with two of the five countries in the region, questioned its credibility, and lost control over both the main source of water resources in the region and the energy sovereignty of Tajikistan. It should also be noted that Uzbekistan has not resumed its participation in the EurAsEC.

A similar situation with Russia repeated itself again in 2016. Russia's bet on participation in the construction of hydroelectric power plants in Kyrgyzstan (as well as in the case of Tajikistan) has failed. When Uzbekistan called for regional integration «without Russia's participation» in 2010, Russia expressed interest in participating in the Transregional hydropower project CASA-1000. The aim of this project is to sell the surplus electricity generated by the hydroelectric power plants of Kyrgyzstan and Tajikistan to Afghanistan, Pakistan, and later to the Northern territories of India. As far back as in February 2009, Russia provided Kyrgyzstan with a loan of two billion dollars for the construction of HPPs, on 20 November 2012, Russian companies Inter RAO and RusHydro signed agreements with the government of Kyrgyzstan on the beginning of the construction of hydroelectric power plants. Uzbekistan's reaction was not long in coming, and a month later, on 19 December 2012, Uzbekistan suspended its participation in the CSTO (again) in protest. The withdrawal from the military bloc by Uzbekistan was not just a loss of its influence in that state for Russia, it was a loss of a full-fledged political, economic, and most important military ally on its southern borders. It is possible that the attempts to return Uzbekistan back to the CSTO were the reasons for the «financial crisis» to continue the construction of the HPPs in Kyrgyzstan, as in early 2013 the Russian company «Inter RAO» reported «the lack of funds for the construction of the Kambarata HPP-1» [15]. The process of slowing down the development of the hydropower sector in Kyrgyzstan was started, and three years later, on 20 January 2016, the Kyrgyz Parliament (following the example of its colleagues from Tajikistan) denounced the signed agreements with Russia on the construction of hydroelectric power plants on its territory [15]. It is noteworthy that after the loss of the hydropower project in Kyrgyzstan, several Russian scientists and researchers stated that the construction of the Rogun HPP (and the Kambarata HPP in Kyrgyzstan) and the implementation of the CASA-1000 project are ineffective and unviable. Nevertheless, Russia does not officially refuse to participate in the CASA-1000 project, and from year to year reminds Central Asian «strategic partners» of its interests in participating in the project. Tajikistan and Kyrgyzstan aren’t in a hurry to invite Russia as a sponsor since the start of the CASA-1000 project, as they understand that this will lead to a decrease in their state sovereignty. The experience of Russia's participation in the development of hydropower in these countries reminds them of this threat to this day. This is confirmed by Russia's integration efforts with the countries of Central Asia within the framework of the Eurasian Economic Union (EAEU — former EurAsEC), which includes the Customs Union, the introduction of a single currency, a single economic space and other institutions where the rules of the game are dictated by Russia. Since the countries of the region are economically weak, integration with Russia will lead to their full (economic and political) dependence on Russia and the loss of state sovereignty. The hydropower sector is the future of modern Tajikistan, and the independent development of this sector should remain a priority for the present. Based on all of the above, we can say with confidence that not only Russia but also any country or organization that requires a controlling stake in response to assistance, poses a threat to the state sovereignty of Tajikistan and HPP Sangtuda-1 as a symbol, is a direct proof of this. Based on the latest published data of OJSC Sangtuda-1 at the beginning of October 2018, Tajikistan's debt to OJSC Sangtuda-1 amounted to 1 billion 29 million somonis ($110 million) [16]. For 9 months of 2018, the debt of Tajikistan to Sangtuda-1 increased by $25 million [16]. Other countries should not be allowed to have control over the energy sector, which is vital for the republic. Tajikistan needs to minimize the use of electricity from the HPP Sangtuda-1, as well as to buy back the entire stake from Russia. Unfortunately, the Republic has no financial opportunity to buy shares from Russia at the moment, but Rogun HPP is a solution. The transition of the Republic to the electricity consumption of Rogun HPP and its refusal from the electricity of HPP Sangtuda-1 will return to Tajikistan its full sovereignty over the hydropower sector. Only after that, the redemption of all shares from Russia will be possible. While Tajikistan buys electricity from HPP Sangtuda-1, Russia will not agree to sell its shares. However, it should also be remembered that Russia has some levers of pressure on Tajikistan — it is migrant workers and Tajikistan’s debts to Russian companies. Tajikistan needs to be both economically and politically ready for an «asymmetric response» from Russia. Tajikistan will be given an ultimatum: either to return the accumulated debts or labour migrants will be expelled from Russia, as it was in November 2011 with the «case of pilots» [17].

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