DUSHANBE, October 3, 2011, Asia-Plus  -- Tajikistan’s lower chamber (Majlisi Namoyandagon) of parliament has ratified an agreement between the Government of Tajikistan and the Export-Import Bank of China (China Exim Bank) on providing a US$26.5 million preferential loan to Tajikistan.

A regular sitting of the third session of the Majlisi Namoyandagon of the fourth convocation, presided over by its head, Shukurjon Zuhurov was held on October 3.

Presenting the agreement, Minister of Finance Safarali Najmiddinov said the loan would go to financing the construction of a new substation, Sughd-500.  According to him, the operating substation, Khujand-500, is not able to ensure regular electricity supplies to northern Tajikistan through the 550kV South-North power transmission line.

“The government’s share in the project is 1.4 million U.S. dollars and China allocates the preferential loan with an annual interest rate of 2.0 percent for 33 years with a seven-year grace period,” the minister said.

Construction of the Sughd-500 substation will also promote implementation of the Central Asia South Asia Electricity Trade and Transmission Project (CASA 1000), which aims to establish the necessary transmission and trading infrastructure and systems to enable a trade of surplus electricity from Tajikistan and Kyrgyzstan to Afghanistan and Pakistan,” the minister said.

Mr. Najmiddinov told Asia-Plus after the sitting that construction of the Sughd-500 substation would begin within the next few days.  The substation is scheduled to be finished by the end of this year, the minister noted.

MP Shodi Shabdolov, who is also leader of the Communist Party of Tajikistan (CPT), noted that the Tajik side would only gain benefit from that loan, “because nobody else is able to offer us such preferential loans.”  He, however, considers that construction of such substations will be unproductive without construction of large hydroelectric power plants (HPPs) such as Roghun HPPP.

The Export-Import Bank of China (China Exim Bank) is one of three institutional banks in China which chartered to implement the state policies in industry, foreign trade, diplomacy, economy and finance to provide policy financial support so as to promote the export of Chinese products and services. It was founded in 1994, and is subordinated to the State Council.

The parliament also ratified a loan agreement of the Government of Tajikistan with the Islamic Development Bank (IsDB), Saudi Fund for Development, Kuwaiti Fund for Arab Economic Development, Abu Dhabi Fund for Development and the OPEC Fund for International Development on the Kulob-Qalai Khumb road rehabilitation project.

Minister of Transport Nizom Hakimov noted that estimated budget of the project was 92.2 million U.S. dollars.  Tajik governments share in the project amounts to 7.9 million U.S. dollars.