Tajikistan scraps sales of Roghun shares

By bne IntelliNews November 20, 2012

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Sales of shares in Roghun HPP, the company set up to build the Roghun dam and hydropower station in Tajikistan, have been discontinued, with the government campaign to raise funds from the population having run out of steam.

The company stopped selling shares earlier this year due to a lack of demand, an unnamed source at Tajikistan's finance ministry told Asia Plus. "There was no demand for the shares this year, although there was a small amount of demand last year. We cannot explain the reason for this."

In response, Tajikistan, which is already building supporting infrastructure at the Roghun site, has increased its allocation for the project in the 2013 budget. The draft plan, announced on November 9, includes a TJS1.2bn allocation, AP reports, a rise of around TJS100m.

The sum held in Roghun HPP's accounts at Tajikistan's central treasury from the sale of shares in the company has stood at TJS804.7m ($169m) since the beginning of 2012. Roghun issued shares that could be purchased for TJS100, TJS500, TJS1,000 or TJS5,000. Sales were rapid in the first year after shares were first issued on January 6, 2011, but have since declined. Overall, only 1.8m of the 5m shares issued have sold.

The Tajik government's attempt to raise funds for the project from the population after failing to attract international investors has been criticised by observers. The IMF noted that heavy pressure was being put on state employees and private companies to invest. At TJS100 - around the average weekly salary in Tajikistan - the entry level stake represents a considerable burden for most.

Dushanbe is keen for construction to go ahead as it would solve Tajikistan's domestic energy shortage and even produce surplus electricity for export during the summer months. However, Uzbekistan will be delighted to hear of the funding problems. Tashkent fears that the dam will restrict water supplies to its cotton fields, and has been holding up construction materials bound for Roghun on the Uzbek-Tajik border.

Tajikistan has turned to the World Bank in the hopes of getting funding from international financial organisations to fund construction, and has agreed not to start construction until it completes an assessment of the project. The lender is expected to complete that in June.

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