Tajikistan and ADB

ADB's Work in Tajikistan

With some of the world’s highest mountains covering 93% of its territory, Tajikistan faces obvious obstacles to its development. These include food insecurity, limited transport connectivity, and low levels of private investment. Due to its narrow economic base and reliance on remittances by labor migrants, Tajikistan’s economy remains vulnerable to external shocks.

ADB has partnered with Tajikistan since 1998. The bank’s country partnership strategy, 2016–2020 emphasizes widening Tajikistan’s economic base by exploring the country’s domestic and international competitive advantages, and improving its investment climate to create jobs with higher incomes. Achieving these objectives requires Tajikistan to improve its transport, energy, and municipal infrastructure. It also means upgrading the skills of the labor force and improving food security, including climate change mitigation and adaptation.

Since 1998, ADB has committed 44 grants ($1.309 billion), 28 loans ($498.38 million), and 86 technical assistance projects ($60.9 million) for Tajikistan.

Mountains of the Rasht region, Tajikistan

The Nurek hydropower plant is Tajikistan’s main source of power, producing around 60% of the nation’s electricity

Projects supported by ADB have helped improve three hydropower plants, install or upgrade over 600 kilometers of power transmission and distribution lines, and modernize major electricity substations. ADB is implementing a $35 million grant to reconnect Tajikistan’s electricity system to the Central Asian Power System through interconnection with Uzbekistan. This will help expand regional energy trade and improve regional energy efficiency. The bank is also working with the Government of Tajikistan to implement energy sector restructuring and reforms, improve financial management, and reduce system losses.

In 2019, ADB committed a $10 million grant to help Tajikistan prepare a comprehensive tourism development plan and establish the first tourism satellite account, which is a strategic prerequisite for developing and monitoring tourism in the country by providing industry data impacting the economy, employment, and investments. It will also help identify and develop a pipeline of priority investments and prepare detailed designs for those identified projects.

The bank is also implementing a $10 million grant to help Tajikistan prepare for and respond to natural hazards and climate change, and reduce the impact of disasters.

ADB-supported projects have made clean water available to over 100,000 households in Tajikistan, and improved more than 170,000 hectares of land through better irrigation, drainage, and flood management. The bank is helping to rehabilitate and expand urban water supply and sanitation infrastructure in the southeast area of the capital, Dushanbe, under a $41.18 million grant approved in 2018.

The Asian Development Bank is helping Tajikistan to improve its technical and vocational education system, making it more responsive to labor market needs

In education, ADB is contributing to a project that promotes demand-driven, flexible technical and vocational education and training across the country.

In health, ADB has helped Tajikistan strengthen drug quality-control mechanisms, develop a family group practice framework, rehabilitate and equip about 240 rural health-care facilities, and train approximately 960 family doctors and nurses. The bank is currently implementing a $32 million grant to deliver integrated maternal and child health-care services in the districts of Fayzobod, Rasht, and Shamsiddin Shohin.

ADB has also nurtured a stable microfinance industry in Tajikistan, with increased public funding for critical social expenditure and policy reforms to improve the investment climate, tax administration, public finance management, and social protection.

The Maternal and Child Health Integrated Care Project will provide women and children with quality maternal and child health (MCH) services in Rasht, Tajikistan.

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments from ADB’s own funds (in equity and direct loans) in 2019 amounted to $3.00 billion for 38 transactions in economic and social infrastructure, the finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2019, ADB mobilized $3.28 billion of long-term cofinancing and $3.69 billion of cofinancing in trade finance, microfinance, and supply chain finance programs. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $13.78 billion as of 31 December 2019.

Financing Partnerships

Financing partnerships enable ADB’s development partners, governments or their agencies, multilateral financing institutions, and commercial organizations to participate in financing ADB projects. The additional funds are provided in the form of loans and grants, technical assistance, and other nonsovereign cofinancing such as B loans, risk transfer arrangements, parallel loans and equity, guarantee cofinancing, and cofinancing for transactions under ADB’s Trade Finance Program and Supply Chain Finance Program.

ADB began cofinancing operations in Tajikistan in 2000. Since then, sovereign cofinancing commitments for Tajikistan have amounted to $154.27 million for 21 investment projects, and $19.60 million for 20 technical assistance projects. Nonsovereign cofinancing for Tajikistan has amounted to $5.66 million for one investment project and $0.20 million for one technical assistance project.

In 2019, Tajikistan received $40 million in loan cofinancing from the Organization of the Petroleum Exporting Countries Fund for International Development for the Central Asia Regional Economic Cooperation (CAREC) Corridors 2, 3, and 5 (Obigarm-Nurobod) Road.

Projects Cofinanced, 1 January 2014–31 December 2018

Operational Challenges

Despite substantial progress in developing its economy and alleviating poverty, Tajikistan continues to face challenges in developing infrastructure and attracting private sector investment. ADB is working closely with the government and other development partners to implement wide-ranging reforms in various sectors of the national economy.

Tajikistan boasts high success rates for completed projects supported by ADB as well as timely implementation of ongoing projects. However, challenges persist in project design and ownership, and in securing resources to maintain rehabilitated facilities. To explore new strategies in these areas, ADB and the government have initiated a program to privatize the country’s road maintenance. The bank is also working with the government to improve quality-at-entry for projects as well as to enhance procurement and disbursement efficiency.

Future Directions

ADB plans to support inclusive economic growth in Tajikistan with an assistance package estimated at over $400 million for 2020–2022. This investment pipeline is intended to fund projects that will enhance labor skills, further develop the energy sector (including support for sector reforms and improving infrastructure), promote financial sector development, and improve water resource management. ADB also plans to support projects focused on tourism development, the rehabilitation of key road corridors, urban infrastructure development, climate resilience and disaster management, and investment climate reforms.

ADB is currently preparing a new country partnership strategy for Tajikistan covering 2021–2025.