Reuters reported on July 6 that the European Union (EU) plans to become the top investor in the world’s tallest dam in Tajikistan in a move aimed at helping Central Asia cut its reliance on Russian energy and part of EU’s answer to China’s Belt and Road Initiative.

The EU’s investment arm, the European Investment Bank (EIB), has so far not funded the project, whose main developer is Italian construction firm Webuild.

But an EIB spokesman reportedly told Reuters this week that the Bank has now been asked by the European Commission to become “the largest investor” in the project.

Tajik Minister of Energy and Water Resources Daler Juma reportedly told Reuters last month that Roghun is expected to cost around US$8 billion, of which $3 billion have already been spent.  While it has been largely financed by Tajik government’s bonds and private loans up to now, the government in Dushanbe has requested EU financial and technological support in completing the project, an EU official familiar with the talks said, according to Reuters.

The EIB spokesman reportedly said the Bank was considering a joint investment with the European Commission, which controls the EU multi-billion-euro budget and like the EIB can also raise money in the markets.  The EU executive confirmed that the bloc was open to finance the hydropower Roghun dam project.

He declined to comment on the size of the possible investment and on the reasons for the new commitment, according to Reuters.

Meanwhile, the EU official, who declined to be named because was not authorized to speak to media, told Reuters that a key reason for the EU to become a top investor in the hydropower dam was to make Tajikistan and its neighbors independent from Russian energy.

The EU official was cited as saying that the funding would be part of the EU’s “Global Gateway” strategy.

The Tajik government had no comment.

It is unclear when the EU’s plans could turn into actual investments, but the EU official said that decisions could be made by the final quarter of this year. 

Brussels and its Western allies have been trying to isolate Russia in response to the so-called “special military operation” launched by Russia in Ukraine on February 24. 

The Roghun HPP is an embankment dam in the preliminary stages of construction on the Vakhsh River in southern Tajikistan.  It is one of the planned hydroelectric power plants of Vakhsh Cascade.

The Roghun HPP was first proposed in 1959 and a technical scheme was developed by 1965.  Construction began in 1976 but the project was frozen after the collapse of the Soviet Union.

An agreement on finishing the construction was signed between Tajikistan and Russia in 1994; however, as the agreement was not implemented, it was denounced by Tajikistan parliament.

In October 2004, Tajikistan signed an agreement with Russia's RusAl aluminum company, according to which RusAl agreed to complete the Roghun facility and rebuild the Tursunzoda aluminum smelter.  In August 2007, Tajikistan formally revoked a contract with RusAl, accusing it of failing to fulfill the contract.

In April 2008, Tajikistan founded OJSC NBO Roghun for completing the construction of the Roghun HPP.  

To raise funds to complete construction of the Roghun HPP the government started to sell shares in Roghun to people on January 6, 2010.  Tajikistan has reportedly issued 6 billion somoni worth of Roghun shares.

In 2016, construction duties on Roghun were assigned to Italian company Salini Impregilo (currently Webuild).

The project is broken down into four components, with the most expensive one involving the building of a 335-meter-high rockfill dam — the tallest in the world — which will entail costs of around $1.95 billion.  Construction of the Roghun hydropower plant is expected to be completed in 2033.

Two of the six turbines have already started producing energy for sale to raise funding to complete it.  The first turbine went into service in November 2018 and the second one was introduced into operation in September 2019.

According to data from the Ministry of Finance of Tajikistan (MoF), about 2.5 billion somonis (equivalent to US$220 million at the current exchange rate) have been spent this year so far for completion of the construction of the Roghun hydropower plant.  Since 2008, 37.7 billion somonis have reportedly been spent for construction of this hydropower plant.  

If built as planned, the Roghun hydropower plant, with its 335-metre-tall clay core rockfill dam, is expected to end chronic power shortages in Tajikistan and allow it to export electricity to neighboring countries.