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The governments of Tajikistan and Uzbekistan have signed loan and project agreements with the Asian Development Bank (ADB) within the framework of a regional project aimed at modernising the electricity transmission networks.

This project provides for the rehabilitation of sub-stations, modernisation of control and infrastructure devices and installation of new control-measuring equipment on the border between Tajikistan and Uzbekistan. It is considered that realisation of this project will improve conditions for trade in electric power between Central Asian countries. Oksana Nazmieva, ADB programme implementation coordinator (Dushanbe), says a total cost of the project is US$175mn and the Asian Development Bank is providing US$90mn-US$20mn to Tajikistan, and US$70mn to Uzbekistan.

Besides the ADB loan, the Tajik component of the project will be also financed by the Opec Fund, which will provide to Tajikistan US$2.4mn. Besides, the Barqi Tojik company is also providing US$4.6mn for realisation of the project.

The ADB loan is repayable over 32 years with an eight-year grace period on principal payment. The loan carries an annual rate of 1% during the grace period and an annual rate of 1.5% after it. The Uzbek component of the project will be financed mainly at the expense of the ADB loan provided for 20 years with a five-year grace period. The rate of interest on the loan will be determined every half-year in accordance with Libor rate.

Co-financing of this part of the project will be provided by the European Bank for Reconstruction and Development (US$49mn) and the state joint stock company Uzbekenergo (US$29mn).