TAJIKISTAN: AES STILL IN TEH GAME FOR SANGTUDA-I?

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E.O. 12958: DECL: 4/15/2016
TAGS: PGOV PREL ECON EINV ENRG RS AF TI
SUBJECT: TAJIKISTAN: AES STILL IN TEH GAME FOR SANGTUDA-I?

REF: DUSHANBE 0326

CLASSIFIED BY: Richard E. Hoagland, Ambassador, EXEC, Embassy
Dushanbe.
REASON: 1.4 (b),(d)




1. (C) SUMMARY: National Bank Chairman Murodali Alimardonov
remarked April 14 that AES might still have a role to play in
Sangtuda I or Rogun hydropower stations. In an elegant two-hour
private lunch at the new National Bank building, Alimardonov
outlined next steps for Tajikistan to integrate its energy
sector and other markets with Afghanistan. END SUMMARY.


2. (C) While hosting Afghan Reconstruction Group energy and
water senior advisors, Alimardonov noted the Tajik government
and AES would meet in Washington April 19 to continue
discussions, and possibly sign a memorandum of understanding to
form a joint venture to construct 220 kV transmission line to
the Tajik-Afghan border (reftel).
"This will be a main step to bring Afghanistan and Tajikistan
closer together," he noted. The second step would be
construction of 500 kV lines along the same route.


3. (SBU) Dost-I Zhum, the proposed 4000 MW hydropower station
on the Pyanzh River between Afghanistan and Tajikistan,
represented a third major step. The chairman repeated President
Rahmonov's off-heard talking points about the irrigation
benefits Dost-i-zhum would bring northern Afghanistan, both for
irrigation and job creation.


4. (C) In an almost off-handed remark, Alimardonov suggested
AES might still be a part of Sangtuda I or Rogun, contradicting
press reports and EmbOffs' private conversations with Tajik
energy officials. Ministry of Energy contacts had previously
confirmed Sangtuda would be exclusively for RAO UES, while
aluminum giant RusAL planned to monopolize Rogun. When pressed,
Alimardonov noted that RAO UES and the international financial
institutions wanted AES to remain a player, but then declined to
give any specifics about this unexpected change in policy. "All
will become clear," he said. (NOTE: RAO UES Head Anatoly
Chubais was in Dushanbe the day before. END NOTE.)


5. (SBU) Alimardonov agreed with the suggestion that Tajikistan
could provide Afghanistan with much-needed technical assistance
in energy and other sectors, and sympathized with the lack of
human capacity of the Afghan Water and Energy Ministry.
Tajikistan has also taken a while to rebuild itself after the
Civil War, he observed; although donors had pressed for
immediate reforms, it was still an ongoing process. He
highlighted the banking sector as an example where Tajikistan
has pursued reforms, with the help of USAID, and can now come
close to meeting international standards.


6. (SBU) Tajik-Afghan private-sector exchanges would help drive
the bilateral trade relationship. He listened with interest to
the invitation from leading Afghan businessmen for Tajik
business to display at the Silk Road Trade Show in Kabul May
9-12. The noted the U.S.-financed bridge connecting Afghanistan
and Tajikistan at Nizhniy Pyanzh would be the true catalyst for
spurring cross-border commerce.


7. (C) COMMENT: If RAO UES and RusAL are actually

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reconsidering AES as a potential partner, this would represent a
significant policy shift from the past six months and a return
to the position a year ago, when AES and RAO UES were
negotiating a partnership for Sangtuda-I. We suspect President
Rahmonov is getting a bit exasperated with his Russian partners'
foot-dragging, and may be looking for alternatives. That
wouldn't mean, however, that the Kremlin would agree, since it's
"their" companies and "their" money and "their" projects, or at
least the reported Russian state budget funds for Sangtuda-I.
We would welcome any information and analysis from Moscow. END
COMMENT.
HOAGLAND