MANILA, PHILIPPINES - The Asian Development Bank (ADB) is extending a $122 million grant to expand and modernize Tajikistan's electricity transmission system, which will help it boost energy trading with neighboring countries to meet winter shortages.

ADB's Board of Directors have approved the assistance from its concessional Asian Development Fund for the Tajikistan Regional Power Transmission Project. The work will include the construction of two new 220-kilovolt transmission lines totaling 140 kilometers, as well as the rehabilitation of substations. Along with the physical work, the project will support a series of reforms to restructure Barki Tojik, the state-owned national utility company, and to make operational improvements across the power sector which will address issues such as poor planning and maintenance, low service quality, and weak financial management.

Almost all of Tajikistan's electricity is generated from hydropower, leaving it with high summer surpluses but significant shortfalls in winter. The country's ageing transmission facilities some of which date back to the Soviet era, are in a bad state of repair, and there is limited geographic coverage which affects the evacuation of power from plants, and restricts electricity trade with neighboring Uzbekistan, Afghanistan and the Kyrgyz Republic. Improving Tajikistan's network, including the Regar substation which is a key link in the Central Asian Power System, will help strengthen the overall reliability of the system and reduce breakdowns which cause disputes amongst participating countries.

"The project will increase energy security and efficiency and improve the operational effectiveness of the state utility firm, as well as contributing to increased regional trade in power, which is a key goal under the Central Asia Regional Economic Cooperation Program," said Levan Mtchedlishvili, Energy Specialist, in ADB's Central and West Asia Department.

To improve monitoring and decision making, the project will also install a state of the art, real-time supervisory control and data acquisition system which will replace an outdated and partially-collapsed Soviet telecommunication system and central control panel in the power network. The planned reforms will help reduce financial losses and put Barki Tojik and the power sector on a more sustainable commercial footing, which is a key step in the Government's broader plan to open the sector up to independent power producers and private investors.

ADB's grant makes up 87% of the total project cost of $141 million, with the Government of Tajikistan and Barki Tojik contributing the remaining $19 million. Barki Tojik is the executing agency for the line and substation investments, while the Ministry of Energy and Industry will oversee the reform process. The project is expected to be completed by February 2015.

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