Pamir Energy Development

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GBAO is one of the most isolated and impoverished areas of the world. It experiences long cold harsh winters. During the Soviet period, diesel power plants with subsidized fuel provided electricity to the majority of the population. With the collapse of the Soviet Union, and the subsequent civil war and sharp economic decline, fuel deliveries ceased and the plants have deteriorated beyond repair. As a result, the population has come to depend on fuel wood for cooking and heating. An estimated 70% of the region’s tree cover has been cut down over the decade, schools and other public institutions must be closed during the coldest periods, indoor pollution is acute, and economic activity is stifled. The household income survey undertaken for the project estimated average monthly income for a household of six at $27.The project will generate and supply electricity under a 25-year concession. It will (i) take control of the assets of the state utility (around 40 MWs generation capacity in total) serving 200,000 people, (ii) expand the main Soviet era hydro-plant from 14 MWs to 28 MWs, and construct a river regulating structure at an upstream lake (to provide better winter flows), and (iii) rehabilitate other generation, transmission and distribution assets. In addition, the project will provide tariff subsidy mechanisms to ensure a minimum level of electricity for the poorest. In order to lower the project tariff and provide tariff subsidy mechanisms, IDA is expected to fund the project together with a grant from the Government of Switzerland.