Completed Mixed AidData Chinese Aid

China Eximbank provides $55.2 million buyer's credit loan for 220 kV Lolazor-Khatlon Transmission Line Project (Linked to Record ID#39644, #70910)

$55.23M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Tajikistan Ministry of Finance
Country	Tajikistan
Start Date	Dec 16, 2006
End Date	May 01, 2028
Duration	7,807 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`39984`

Grant Description

China Eximbank provides $55.2 million buyer's credit loan for 220 kV Lolazor-Khatlon Transmission Line Project In March 2006, the Government of Tajikistan and the Export-Import Bank of China signed a MoU for projects proposed by the Government of Tajikistan.

Then, on December 16, 2006, the Export-Import Bank of China (China Eximbank) signed a $55,227,590 buyer’s credit loan agreement [ID#BLA06016)] with the Ministry of Finance of the Government of Tajikistan for the 220 kV Lolazor-Khatlon Transmission Line Project.

📋 Loan / Grant Terms

💰 Loan Amountcarried the following borrowing terms: a maturity of 20 years

The Government of Tajikistan used the proceeds of the loan to on-lend (through subsidiary loan agreement No.

BLA06016) to Open Joint Stock Holding Company (OHSHC) “Barqi Tojik” -- a state-owned enterprise in Tajikistan responsible for the generation, transmission, and distribution of electricity and thermal energy -- at a 3% interest rate between December 16, 2006 and June 21, 2026.

OHSHC “Barqi Tojik” was expected to use the loan proceeds to finance 95% of the cost of a $58,134,305 commercial contract [TOJSC/TBEA-2006/00I] with TBEA Co., Ltd., which was signed on April 19, 2004 and amended on May 9, 2006. The Government of Tajikistan was expected to provide the remaining 5% ($2.9 million) of the commercial contract cost.

The loan's amount outstanding was TJS 434,984,000 as of December 31, 2016, TJS 487,052,000 as of December 31, 2017, TJS 520,774,000 as of December 31, 2018, TJS 535,001,000 as of December 31, 2019, and TJS 624,072,000 as of December 31, 2020. The purpose of the project was to construct a 90 km, 220 kV electricity transmission line between Dangara and Kulab.

This would connect the southern region to the national grid.

The new power transmission line would improve the power supply in the south of the Khatlon region, and create a more stable power supply. The Lolazor-Khatlon line had a capacity of approximately 4 billion kWh of electricity a year.

The project was to provide the Khatlon region with electricity from the Sangtuda 1 and 2 hydroelectric power plants, and allow for the export of electricity to Afghanistan. TBEA Co., Ltd. was the contractor responsible for project implementation. The project was launched in May 2006.

The transmission line was planned to be commissioned by the end of December 2007, but the inclusion of the construction of an additional internal 110 kV transmission line from the Khatlon substation to the Bokhtar substation postponed the start date. The Lolazor-Khatlon transmission line was commissioned on June 25, 2008.

There are some indications that the China Eximbank loan for the 220 kV Lolazor-Khatlon Transmission Line Project may have underperformed vis-a-vis the original expectations of the lender.

According to a 2021 IMF report, ‘[OHSHC “Barqi Tojik”] has significant arrears to the government on [foreign exchange] denominated loans.

The government on-lends concessional [foreign exchange] loans […] from multilateral and bilateral agencies to [OHSHC “Barqi Tojik”] on non-concessional terms. These loans are denominated in [foreign exchange] and are intended to develop the energy infrastructure.

However, these debts are not serviced fully, resulting in [foreign exchange] arrears to the government.’ A 2021 report by the International Energy Agency (IEA) elaborated on this point, explaining that ‘[a] high rate of uncollected payments for electricity use due to illegal connections, power theft and outdated metering infrastructure contribute to the worsening financial health of Barki Tojik.’ Then, in March 2023, the IMF published a report, which noted that ‘[I]n 2021 the SOE sector […] kept accumulating debt service losses, where within a year the amount of debt overdue payments […] increased from TJS 14 billion to TJS 17 billion (17.1 percent of GDP).

Some 93 percent of accumulated overdue debt belongs to [OHSHC “Barqi Tojik”].’

📋 Staff Comments

The Russian project title is высоковольтных линий электропередач 500 кВ «Юг – Север» и 220 кВ «Лолазор –Хатлон».
The loan agreement can be accessed in its entirety (in English and Russian) via https://www.dropbox.com/scl/fi/drfan0vd43nms0r4ldw0z/Takijistan-2006-China-Eximbank-PBC-for-the-220-kV-Lolazor-Khatlon-Transmission-Line-Project-English.pdf?rlkey=bwtxwozzj5xxobilftzrz0fi0&dl=0 and https://www.dropbox.com/scl/fi/6840kgbq7qrtiavxze4me/Takijistan-2006-China-Eximbank-PBC-for-the-220-kV-Lolazor-Khatlon-Transmission-Line-Project-Russian.pdf?rlkey=h2eo04wu4q0bsfqzz2t2rof4s&dl=03. The project is linked to Record ID#70910, which captures a $51 million loan commitment from China Eximbank in 2009 for both the 220 kV Lolazor-Khatlon Transmission Line Project and a 500 kV North-South Power Transmission Line Project. The original loan commitment for the 500 kV project in 2006 is captured via Record ID#39644.

📚 Sources & References

Address of the President of the Republic of Tajikistan Emomali Rahmon to Majlisi Oli (Parliament) of Tajikistan (April 15, 2009)
Case Study: Tajikistan Energy Production and Consumption Sector
China as an Emerging Donor in Tajikistan and Kyrgyzstan
China Eximbank Supports Economic and Social Development of SCO Members for Regional Harmony
Consolidated financial statements for the year ended December 31, 201 8
Consolidated financial statements for the year ended December 31, 2018 and independent auditors’ report
Consolidated Financial Statements for year ended December 31, 2016
Construction of power grid Lolazor-Khatlon near completion
Cross-Border Electricity Trading for Tajikistan: A Roadmap
List of Chinese Government-Financed Projects in Tajikistan from the Ministry of Finance via the IMF May 2018
May 2018 Flat Export from Tajikistan AIMS China S…cific Projects.xlsx
Meeting with the First Vice President of Export-Import Bank of the People’s Republic of China Zhu Hongjie
OPEN JOINT STOCK HOLDING COMPANY “BARQI TOJIK” Consolidated financial statements for the year ended December 31, 2017 and independent auditors’ report
Program Appraisal Document on a Proposed Grant in the Amount of SDR97.2 Million (US$134 million equivalent) to the Republic of Tajikistan for a Power Utility Financial Recovery Program for Results
Project 'Construction of 220 kV OHL Lolazor-Khatlon'
Reconnection to Central Asian Power System Project: Development Coordination
REPUBLIC OF TAJIKISTAN SELECTED ISSUES
Republic of Tajikistan: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Tajikistan
Republic of Tajikistan: Wholesale Metering and Transmission Reinforcement Project
State Debt Report 2009
Status Report on Public Debt of Tajikistan
Strategy for Tajikistan
Tajikistan: Policy Notes on Public Expenditures
Takijistan 2006 China Eximbank Buyer's Credit Loan for the 220 kV Lolazor-Khatlon Transmission Line Project English pdf
Takijistan 2006 China Eximbank Buyer's Credit Loan for the 220 kV Lolazor-Khatlon Transmission Line Project Russian
Test of power grid Lolazor-Khatlon conducted last Saturday, Аудит отчетности ОАХК 'Барки Точик' по МСФО за 2020 год, Глава государства запустит подстанцию «Лолазор-Хатлон», ОТКРЫТАЯ АКЦИОНЕРНАЯ ХОЛДИНГОВАЯ КОМПАНИЯ «БАРКИ ТОЧИК» Консолидированная финансовая отчетность за год, закончившийся 31 декабря 2019 г. и отчет независимых аудиторов, Отчет о состоянии государственного долга на 2009 год, Президент запустил ЛЭП «Лолазор-Хатлон» Подробнее, Пресс-релизы : Подписание Кредитного соглашения между Правительством Республики Таджикистан и Экспортно – импортным банком Китая по проекту «Реабилитации автомобильной дороги Душанбе – Дангара, фаза I», “罗拉佐尔－哈特隆”和“南北”输变电线的建成——塔吉克斯坦电网全国联网的标志 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.