Tajikistan Business Economy - The Times Of Central Asia

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World Bank Allocates $5 Million to Create Agro-Logistics Center in Tajikistan

The World Bank has launched a project to establish an agro-logistics center in Tajikistan’s Sughd Special Economic Zone. The initiative, which began in 2021, aims to strengthen Tajikistan’s agricultural sector by increasing farm productivity and adding value to agricultural products. The center will serve as a critical element of efforts to enhance agricultural infrastructure and efficiency. The $5 million project, fully funded by the World Bank, is part of a broader six-year program titled “Enhancing the Sustainability of the Agricultural Sector,” running from June 2021 to June 2027. This program, with a total investment of $108 million, supports sustainable agricultural development through integrated activities. Construction of the Sughd Center is set to begin in 2025, with completion and commissioning expected by the end of 2026. The Sughd facility is one of five agro-logistics centers planned across Tajikistan as part of the World Bank’s initiative. These centers aim to reduce product losses and improve efficiency by introducing international standards for post-harvest handling of fruits and vegetables. Services provided will include sorting, packing, storage, and transportation, enabling Tajik producers to access new export markets and strengthen the national economy.

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Tajikistan Seeks to Reduce the List of Prohibited Professions for Women

Tajikistan is taking steps to further reduce the list of professions prohibited for women, cutting the number from 334 to 194 in 2024. This initiative aims to expand women’s access to employment opportunities in industries previously deemed unsuitable. According to Shakhnoza Nodiri, Deputy Minister of Labor, Migration, and Employment of Tajikistan, the decision aligns with efforts to modernize production, automate processes, and enhance workplace safety, thereby making previously restricted jobs accessible to women. The list of banned professions was initially established to protect women’s health from the risks of heavy and hazardous work. However, it is increasingly viewed as a barrier to women’s professional growth. The recent changes are informed by international standards and the recommendations of the European Union, particularly to align with GSP+ preferences, which promote gender equality in the labor force. “By revising this list, we are enabling women to access new opportunities and strengthen their economic position,” Nodiri emphasized. Previously, the list included 336 prohibited professions, such as work in underground mines and other roles involving hazardous conditions. With advancements in technology, automation, and improved workplace conditions, 142 professions have been deemed safe for women. However, restrictions remain for roles involving particularly heavy or harmful work. Data from the Labor and Employment Agency show that in 2024, 29,296 women were employed, marking a 1.4% increase compared to the same period in 2023. This reflects growing opportunities for women in the labor market. The government plans to continue reducing the list of prohibited professions, aiming to allow women to participate fully in all sectors of the national economy. Article 216 of the Labor Code of Tajikistan prohibits women from working in heavy and underground industries. Employers who violate these regulations face administrative fines. Ongoing labor law reforms seek to strike a balance between safeguarding women’s health and ensuring their right to work. As Tajikistan modernizes its labor policies, the country moves closer to achieving a more inclusive and equitable workforce.

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Tajikistan’s External Debt Reaches $3.25 Billion

As of October 1, Tajikistan’s external debt stood at $3.25 billion, according to a report by Asia-Plus citing the Ministry of Finance. This represents a modest 0.2% increase, or $7.1 million, compared to January 1. Approximately 96% of the debt comprises direct government debt, incurred to meet state obligations, while $138.8 million is under state guarantees. Tajikistan’s external debt-to-GDP ratio is 27%, which is considered a favorable level. The largest creditors include the World Bank ($370 million), the Asian Development Bank ($260 million), the Islamic Development Bank ($212 million), and the European Bank for Reconstruction and Development ($167 million). A significant portion of the debt, $500 million, consists of Eurobonds issued in 2017 to finance the completion of the Rogun Hydroelectric Power Plant. While the government adheres to the repayment schedule for these bonds, only interest payments have been made so far. Next year, Tajikistan is expected to seek additional loans from development partners to continue work on the Rogun Hydroelectric Power Plant. This move is anticipated to substantially increase the country’s external debt. By way of comparison, The Times of Central Asia recently reported that neighboring Uzbekistan’s public debt is projected to reach $45.1 billion by the end of 2025.

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Kazakhstan to Begin Purchasing Electricity from Rogun HPP

Kazakhstan has announced plans to purchase electricity from Tajikistan’s Rogun hydropower plant (HPP), a major facility currently under construction. According to a draft agreement published on Tajikistan's official legal information portal, the cooperation between the two countries is set to last for 20 years, with an option to extend for an additional 10 years. The price for the electricity is set at $0.034 per kilowatt-hour (excluding VAT), plus a transit surcharge determined by the seller’s costs. Payments are to be made within 35 days for each supply period. The supply will only occur during scheduled shortages and will be integrated into KEGOC’s national grid. Rogun HPP will handle transportation to the border, while the Settlement and Financial Center for Renewable Energy Support LLP will oversee control on the Kazakh side. Any disputes arising from the agreement will be resolved through the Singapore International Arbitration Center. Electricity agreements with Kazakhstan and Uzbekistan are a critical component for securing international financing for the Rogun HPP’s construction. Project costs have risen to $6.4 billion, according to recent estimates. To cover these costs, the Tajik government is negotiating semi-concessional loans worth $1.73 billion, $850 million in grants, and $390 million in concessional loans. The remainder will come from the government budget and revenues generated by the plant. This year, the Tajik government allocated 5 billion somoni (approximately $460 million) for the Rogun project, with 2.8 billion somoni coming from the state budget and 2.2 billion somoni from investment projects. By the end of September 2024, 4.3 billion somoni (about $395 million) had already been spent on construction. Once completed, Rogun HPP will become the largest hydropower facility in Central Asia, boasting a capacity of 3,600 MW and capable of producing up to 17 billion kWh of electricity annually. This output represents 65–85% of Tajikistan’s total electricity production. The plant will house six units of 600 MW each, with full commissioning expected by 2029. Currently, two units are operating at low capacity, having been commissioned in 2018 and 2019. The project serves as a landmark achievement for Tajikistan’s energy sector and a key driver of regional energy cooperation, promoting economic stability and resource-sharing throughout Central Asia.

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Russia Looking to Export Gas to China via Kazakhstan

Russia continues to try to reorient its natural gas exports from Europe to Asia and is planning a new pipeline route to China that would pass through Kazakhstan. Kazakhstan stands to benefit not only from transit fees, but could also import some Russia gas for regions in northeastern Kazakhstan that are desperately in need of more energy sources. The Russian plans are bad news for Turkmenistan as China is Turkmenistan’s main gas customer and Turkmen authorities were hoping to sell China even more gas. On November 15, Russian Deputy Prime Minister Aleksandr Novak mentioned the pipeline plan on the sidelines of a Chinese-Russian forum in Kazan, Russia. Novak said such a project is still only being discussed, but Russian media outlet Kommersant wrote on November 18 that there are already three options for the pipeline. All three possibilities pass though northeastern Kazakhstan, but Kazakhstan’s level of participation in the pipeline is different in each variation. One of the projects would require Kazakhstan to build a pipeline for gasification of the northeastern Pavlodar, Abai, and Karaganda provinces. A second proposal would include only the Abai and Zhetysu provinces. Russian gas giant Gazprom’s financial obligation also changes depending on the pipeline project selected. The most expensive option for Gazprom would cost more than $10 billion to construct and would not operate at full capacity until 2034. All versions foresee at least 35 billion cubic meters of Russian gas (bcm) shipped via the pipeline with Kazakhstan receiving some 10 bcm, which would greatly alleviate recent power shortages in northeastern Kazakhstan. Despite Novak saying the pipeline project was only being discussed, Kazakhstan and Russia appear well along in their planning. In early May, Kazakh Ambassador to Russia Duaren Abayev gave an interview to Russia’s TASS news agency and mentioned there was a “roadmap” for supplying 35 bcm of gas to China via Kazakhstan. Russia already exports gas to China via the “Sila Sibiri” (Power of Siberia) pipeline and expects that in 2024 the pipeline will for the first time reach its full capacity of 38 bcm. Construction of Sila Sibiri-2 with a planned capacity of some 50 bcm has been delayed due to China’s reluctance to loan Russia money for construction, differences over price, and China’s increasing purchases of liquefied natural gas (LNG). Novak commented on Sila Sibiri-2, saying the pipeline project involving Kazakhstan was separate and the Russian government will continue to negotiate with China about construction of Sila Sibiri-2. Russia is seeking to replace its former main customer, the European Union. Prior to the Kremlin launching its full-scale war on Ukraine in February 2022, the EU was buying between 150-160 bcm of Russian gas annually. The EU sharply cut back on Russian gas imports in response to the invasion of Ukraine and in 2023 imported less than 43 bcm. Russia’s pivot to Asia for gas exports targets the Chinese market, but Gazprom is looking to take any possible Asian customers and has found some in Central Asia. Russia’s surge into the Asian...

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Fueling Growth: IFC Strategic Initiatives for Sustainable Development in Central Asia – An Interview With Hela Cheikhrouhou

With its headquarters in Washington, D.C. the International Finance Corporation (IFC) was established in 1956 as the private-sector arm of the World Bank. The institution offers advisory, and asset-management services to promote investment in developing countries. Recent ventures in Central Asia include solar power projects in Uzbekistan and Kyrgyzstan, and an entrepreneurship scheme for women and young people in Tajikistan. TCA spoke with Hela Cheikhrouhou, IFC Vice President for the Middle East, Central Asia, Türkiye, Afghanistan, and Pakistan about the IFC’s work in Central Asia. TCA: Can you please give us an overview of IFC's performance in Central Asia for fiscal year 2024 (July 1, 2023, to June 30, 2024)? IFC had a pivotal year in Central Asia, making strides in sustainable development and inclusive growth across the region. Our efforts concentrated on climate finance, infrastructure, agriculture, and supporting smaller businesses. By coupling investments with advisory support, we helped expand the role of the private sector, creating jobs, promoting financial inclusion, strengthening infrastructure, and supporting the region's green transition. In the fiscal year 2024, IFC committed over $1 billion to Central Asia. This includes about $400 million in long-term financing from our own account, $600 million in mobilization, and $35 million in short-term trade and supply-chain finance to facilitate trade flows. Alongside these financial commitments, we engaged in advisory projects focused on improving financial inclusion, developing innovative public-private partnerships (PPPs), and advancing climate initiatives and gender equality. Our results this year underscore our commitment to fostering sustainable, inclusive growth, and enhancing the resilience and sustainability of Central Asian economies. TCA: Can you highlight some of the IFC’s key achievements in Central Asia this year? In addition to the strong financial commitments mentioned earlier, IFC expanded its presence in various sectors, including finance, capital markets, renewable energy, agriculture, and infrastructure. Through our advisory services, we helped structure impactful PPPs at the sectoral level. A major focus this year has been strengthening local financial markets. IFC invested $228 million across ten financial institutions in Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan. Up to half this amount was dedicated to supporting women entrepreneurs and rural enterprises. We also helped these financial institutions expand portfolios related to their micro, small, and medium enterprise (MSME) businesses, advance climate finance, foster digital transformation, and issue the region’s first sustainability, social, and green bonds. Supporting MSMEs has enabled entrepreneurs to grow their businesses and generate employment. In the past fiscal year alone, IFC-supported projects created around 35,000 direct jobs, including opportunities for over 13,000 women across the region. These efforts have been further bolstered by targeted investments and projects in individual countries across the region. In Uzbekistan, IFC, together with the World Bank, financed a new solar plant equipped with the country’s first battery energy storage system. Once completed, the plant is expected to provide electricity access to around 75,000 households in the Bukhara region. As part of its broader support for the Uzbek government’s efforts to reform its chemical sector, IFC assisted the State Asset Management Agency in privatizing Ferganaazot,...