TAJIKISTAN'S POWER POLITICS: DEPUTY PM GHULOMOV REMAINS

C O N F I D E N T I A L SECTION 01 OF 02 DUSHANBE 001027 SIPDIS SIPDIS EMBASSY MANILA: PLEASE PASS TO ADB AMBASSADOR SPELTZ E.O. 12958: DECL: 6/2/2016 TAGS: PGOV PREL ENRG ECON EAID AF TI SUBJECT: TAJIKISTAN'S POWER POLITICS: DEPUTY PM GHULOMOV REMAINS COMMITTED TO US ROLE IN ENERGY SECTOR REF: A) DUSHANBE 0835 B) STATE 85450 C) DUSHANBE 0978 CLASSIFIED BY: Richard Hoagland, Ambassador, US Embassy Dushanbe, State. REASON: 1.4 (d) CLASSIFIED BY: Richard Hoagland, Ambassador, US Embassy Dushanbe, State. REASON: 1.4 (d) ¶1. (SBU) Tajikistan is the most attractive country in Central Asia for hydro power investment, according to Deputy Prime Minister Ghulomov, and he intends to demonstrate that to investors and suppliers alike at the "Energy Without Borders" conference in Istanbul June 12-14. In a 45-minute meeting with PolOff June 1, he stated clearly his personal goal for the U.S. Trade and Development Agency (TDA) sponsored meeting: attract investment in Tajikistan's numerous potential hydropower stations and transmission lines projects. He noted that his overview presentation will highlight existing cooperation agreements with Afghanistan, demonstrating how Tajikistan can play a central role in regional infrastructure integration. ¶2. (SBU) Ghulomov was pleased to learn that a $800,000 TDA grant to AES to study transmission lines to Afghanistan was one of the key deliverables of the conference (ref B). He tentatively agreed to sign the Memorandum of Understanding for all participating countries in Istanbul, but requested time to review the agreement. ¶3. (C) Ghulomov dismissed AES' worries that RAO UES may be creeping on the U.S. firm's plan to export excess Tajik electricity. At the beginning of the meeting, a concerned Oumed Latipov of AES asked for a few moments to clarify a conversation he had with a RAO UES representative in Dushanbe. RAO reportedly is working with the Tajik authorities to sell summer excess electricity to Uzbekistan, potentially reducing the amount of electricity available for AES to sell. (NOTE: Were this true, it would also mean RAO would have removed the major hurdle to donor funding for Sangtuda-I. The World Bank and other international financial institutions (IFIs) have said they will only fund hydropower stations producing for export, in direct conflict to President Rahmonov's declaration that Sangtuda-I must be used for domestic consumption. Exporting summer power may be RAO's way to get IFI funding for the additional $250 million to finish the $550 million project. END NOTE.) ¶4. (C) Ghulomov rolled his eyes and replied, "We signed an agreement with you. We will honor that agreement. Why do you have doubts?" referring to the May 24 MOU signed establishing a Tajik government-AES joint venture to build transmission lines to the Afghan border (ref C). He reminded Latipov that President Rahmonov had given AES the right to manage the joint venture for 12 years, a clear indication of his trust. He noted that the AES transmission line project would not be in operation until late 2007, and until then, Tajikistan needed to sell its 1.5 billion kW hours to someone. Selling summer excess in 2006 and 2007 in no way threatened the agreement with AES. He did urge AES to accelerate its project. (COMMENT: A bit ironic, considering the May 24 MOU had been with the Tajik authorities since January 31. END COMMENT.) After Latipov left, Ghulomov reiterated to PolOff that the Tajik government stood by its agreement. ¶5. (C) COMMENT: Enthusiastic and committed to the Istanbul conference, Ghulomov will not attend the June 15 Shanghai Cooperation Organization meeting in Shanghai (where President Rahmonov will likely ink a $320 million agreement for Chinese development of transmission lines, telecommunications networks and road and tunnel construction) in order to attend the U.S.- sponsored meeting in Turkey. His challenge will be convincing DUSHANBE 00001027 002 OF 002 donors and investors that Tajikistan is ready to do business by Western standards and willing to move at a Western pace. END COMMENT HOAGLAND