ENERGY SAVING LIGHT BULBS, NOT SUCH A BRIGHT IDEA

UNCLAS SECTION 01 OF 03 DUSHANBE 000712

SENSITIVE
SIPDIS

DEPT FOR SCA/CEN

E.O. 12958: N/A
TAGS: ENRG PGOV ECON ETRD TI
SUBJECT: ENERGY SAVING LIGHT BULBS, NOT SUCH A BRIGHT IDEA

DUSHANBE 00000712 001.2 OF 003



1. (SBU) Summary. In April President Rahmon signed a decree
obligating all residential and commercial entities in Tajikistan
to begin switching to energy-saving lightbulbs by May 1. The
President said the change from incandescent lighting would save
millions of kilowatt-hours of electricity annually. Energy
experts find the claims highly exaggerated. New Chinese-made
energy-saving bulbs, mountains of which are for sale in
Dushanbe's markets, cost between $1.50 and $4.50, compared to
$0.25 to $0.50 for incandescent bulbs. One of the biggest
importers of these new bulbs is rumored to a Presidential
daughter. According to Embassy sources, she imports truckloads
of bulbs and other goods from China, circumventing customs
officials at the border. The switch to energy-savings bulbs may
be another example of an apparently progressive regulation in
fact designed to benefit the President's inner circle. End
summary.



President Commands: Let There Be (Energy-Saving) Light

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2. (U) On April 24, 2009 President Rahmon signed decree #653 "on
additional measures on economical use of energy and energy
saving," which dictates that from May 1, 2009, all residences
and commercial entities in Tajikistan must begin using energy
saving light bulbs. The decree stipulates that by the end of
2009 all incandescent bulbs must be changed to the new energy
saving models. The new bulbs, at $1.50-4.50 versus $0.25-0.50
for incandescent bulbs are a significant cost to Tajik
households, whose incomes average less than $200 per month. The
government announced that it would provide free lightbulbs to
241,000 poor families by October to help them fulfill the
decree. (Note: According to the World Bank, 53% of Tajikistan's
population of roughly 7 million lives under the poverty level.
End note.) The President also ordered that two new plants be
set up by 2011 to manufacture energy-saving bulbs.



Tajikistan's Energy Woes

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3. (U) The President has said the introduction of the new bulbs
would save millions of kilowatt-hours of electricity per year.
Officials at the state electrical company Barki Tojik have gone
further, saying the measures will save as much as 3 billion kWh.
While this claim is wildly overblown, the need for better
energy policy and improved efficiency in Tajikistan is
indisputable. Tajikistan has the potential to produce more than
300 billion kilowatt-hours (kWh) of electricity per year, mainly
through hydropower, but currently produces only 16.5 billion kWh
annually -- i.e., only 5.5% of its potential. The biggest
energy problem the country faces is the cyclical nature of its
hydropower generation. During the winter months low water
levels mean that far less power can be generated. During Soviet
times the winter deficit was supplemented with power from
neighboring regions. Since independence, and as a result of
poor regional relations, most regions of Tajikistan face severe
rationing, receiving only an hour or two of electricity per day
in the winter.




4. (U) Energy wastage and other inefficiencies are significant
problems in Tajikistan. Most of the country's electrical grid
was built a half-century ago, when efficiency was a lower
priority, and there have been few renovations since. In
addition to technical losses, corruption and outright theft at
all levels are significant problems. Barki Tojik estimates that
the country loses some 30% of its annual output due to various
problems. International financial institutions and energy
experts argue that wastage is exacerbated by pricing policies
that do not make consumers value energy. The cost of
electricity in Tajikistan, averaging about 1.8 cents per kWh, is
among the cheapest in the world and is well under production
costs. At the recommendation of the World Bank, the Tajik
Government plans to increase average tariffs to 2.5 cents per
kWh by 2010, still very low compared to other countries in the
region and around the globe.




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5. (SBU) Even if residential rates are raised, it will not have
much effect on overall energy consumption and availability until
authorities tackle industrial use. Tajikistan's largest
industrial energy consumer, the TALCO aluminum plant, uses as
much as 60% of the country's total production, but pays only
1.09 cents per kWh at today's exchange rates. Since most of
TALCO's profits go to off-shore companies rumored to have close
connections to President Rahmon, it is unclear if the government
will find the resolve to raise energy rates for TALCO.



The Darker Side of the President's Light Policy

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6. (SBU) According to several Embassy contacts in the business
community, the largest supplier of energy saving lightbulbs to
Tajikistan is affiliated with one of the President's daughters,
Tahmina Emomali. According to one contact, a particularly large
shipment of lightbulbs from China reached Tajikistan right
around the time of the President's decree. An Embassy customs
service contact refused to comment on the shipment, only smiling
and saying it was too provocative to ask such questions. But
there is other anecdotal evidence from customs officials that
Emomali regularly brings shipments from China to Tajikistan,
which are hastened through the border crossing without being
examined by customs agents or assessed import tariffs. Rahmon
has directed the Tajik customs service to report on the number
of energy-saving lightbulbs imported into Tajikistan -- a move,
some suggest, designed to keep tabs on his daughter's
competition.




7. (U) The sudden changeover from incandescent bulbs has
instantly created a new multi-million dollar market in
Tajikistan. Chinese-made energy-saving bulbs cost between $1.50
and $4.50, depending on the model and manufacturer. With over
one million private energy consumers and over 30,000 industrial
consumers, the Embassy estimates that the total market for the
new bulbs is as high as $30 million. With prices averaging
between $0.25 and $0.50 per bulb, incandescent bulbs earned much
less. According to media reports, the Tajik government received
a proposal from the Chinese firm Opple to build two
energy-saving lightbulb plants in Tajikistan. The company
claims that it already exports Chinese-made bulbs to 80
countries. Opple officials reportedly have examined two
potential locations, including a former bulb factory in the
northern city of Isfara and a site in the President's hometown
of Dangara. No further actions have been taken.



Safety Concerns

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8. (U) Many Tajiks are concerned that Chinese-made energy saving
light bulbs pose a health risk because they contain mercury.
Government agencies, including the inspection agency
TojikGosstandart, say the bulbs pose no risk, because the level
of mercury is too low to have any effect on the human body. But
an independent researcher in the northern city of Chkalovsk,
Viktor Lyadskiy, said that because the Chinese bulbs have a very
short lifespan, even small amounts of mercury can accumulate to
form toxic levels. Unless the mercury is stored deep
underground, it may indeed pose a threat to humans. Lyadskiy
has accused Tajik authorities of failing to check the quality of
imported bulbs and of neglecting important health and safety
issues.




9. (SBU) Comment. While few argue against the importance of
energy conservation, the President's sudden, sweeping war on
incandescence have led many to suspect an ulterior motive. It
is difficult to distinguish facts from rumors in the shadowy
world of Tajik business, but the contention that the President's
daughter benefits from his recent decree is entirely believable.
Promoting energy-saving technology is a good idea. If the
government is serious about relieving some of Tajikistan's
perennial energy problems, however, it will work to create a
more rational pricing policy for residential consumers and TALCO
alike, while promoting small-scale alternative energy production

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that would lessen the load on the state's hydropower resources.
Otherwise the energy-saving bulb decree looks like just another
way to line the pockets of the President's inner circle at the
expense of financially stressed Tajik hosueholds.

End comment.
JACOBSON