Tajikistan’s government has secured legislative approval for the revised version of a plan to use a bank recapitalisation programme as a means of raising funds for work on the Roghun hydroelectric power plant (HPP).
On April 21, the lower house of the Tajik parliament voted to endorse the plan, which calls for issuing 530 million somoni (US$62.5 million) worth of bonds to recapitalise two banks – Agroinvestbonk and Tojik Sodirot Bank (TSB). According to the plan, the proceeds of the bond issues will be used to fund the Roghun project.
Both TSB and Agroinvestbonk suffered severe cash shortages last year that left them unable to cover withdrawals by customers, including private citizens seeking to recover their savings and government departments seeking to pay public-sector employees. As such, the Tajik government named them as beneficiaries of a recapitalisation programme launched late last year.
Under that programme, Dushanbe issued 3.85 billion somoni (US$450 million) worth of bonds with the aim of covering most of the cost of recapitalising distressed banks on December 21. Agroinvestbonk and TSB were not the only intended targets, as the government was also seeking to help two other banks – Fononbank and Tajprombank.
In December, Tajik officials said that the proceeds of the bond issue would be divided up as follows: 2.25 billion somoni (US$270 million) to TSB, 1.7 billion somoni (US$200 million) to Agroinvestbonk, 450 million somoni (US$53 million) to Tajprombank and 80 million somoni (US$9.4 million) to Fononbank. But the latter two banks were forced to close their doors in late February, when the National Bank of Tajikistan revoked their operating licences.
As a result, Dushanbe has not yet offered the 530 million somoni (US$62.5 million) worth of bonds issued on behalf of Tajprombank and Fononbank. The new version of the plan makes provisions for moving forward with the sale so that the proceeds can be channelled into the Roghun project.
The date of the bond issue has not been set yet. The Tajik Finance Ministry intends to move forward with the sale once it signs an agreement with the company set up to build the Roghun HPP and the central bank, according to Deputy Finance Minister Jamshed Nourmahmadiyon.
Existing plans call for the Rogun HPP to include six units, each with a generating capacity of 600 MW, and a dam nearly 335 metres high, which will make it the tallest in the world. Work on the plant began in the mid-1970s, during the Soviet era, but was frozen in the early 1990s. Dushanbe has tried several times to push forward with construction, but the project has been on hold since 2012, partly owing to disputes over shareholder structure, design and budgeting.