Tajikistan’s lower house of parliament, Majlisi Namoyandagon, has approved a €10 million loan agreement with the European Bank for Reconstruction and Development (EBRD) to modernize electricity distribution networks in Kulob and surrounding districts, improve power supply reliability and reduce electricity losses.
The funds will be used to upgrade ageing infrastructure, install modern electricity meters and introduce improved billing systems, according to the parliamentary newspaper Sadoi Mardum.
Presenting the agreement to lawmakers, Finance Minister Fayziddin Qahhorzoda said it was signed on 5 August 2026. After discussions in parliamentary committees, deputies approved the agreement and adopted a corresponding resolution.
The EBRD’s Board of Directors approved the additional financing on 22 July 2026. The funds will be provided as a long-term sovereign loan to Tajikistan and transferred to OJSC Shabakahoi Taqsimoti Barq (Electricity Distribution Networks), which is responsible for distributing electricity and settling accounts with consumers.
What will be modernized in Kulob?
The project provides for the modernization of electricity distribution networks, installation of automated meters and introduction of a modern billing system. It also includes the construction of a new 110/35/10 kV substation and the modernization of an existing facility.
Automated metering is expected to improve the accuracy of consumption data and billing, reduce commercial losses and increase payment collection rates.
Continuation of an earlier project
The additional financing builds on an EBRD-backed electricity-loss reduction project approved in November 2020. The original program covered the modernization of distribution networks in Kulob, Bokhtar and surrounding areas.
The project was valued at €36.4 million, including an EBRD loan of up to €20 million and a €15 million European Union investment grant. The funding was intended for upgrading low-voltage networks, constructing and modernizing substations, and introducing automated metering and billing systems.
The additional €10 million will expand the work to upgrade distribution networks and install modern metering equipment in Kulob and nearby districts.
Electricity losses and consumer debt remain major challenges
Electricity losses remain a significant challenge for Tajikistan’s energy sector, reflecting both the technical condition of distribution networks and problems with consumption metering and payment collection.
According to the Ministry of Energy and Water Resources, electricity losses in the first half of 2026 totaled 1.654 billion kWh, or 12.9% of the electricity supplied. This was 607.9 million kWh less than in the same period of 2025.
Meanwhile, outstanding electricity bills, including debts accumulated in previous years, reached 3.835 billion somoni as of 1 June 2026. Households accounted for approximately 1.127 billion somoni, while aluminum producer TALCO owed 991.4 million somoni.
Other EBRD funding to reduce electricity losses
The modernization of Kulob’s electricity grid is part of wider efforts to upgrade Tajikistan’s power infrastructure and improve the financial performance of electricity distribution companies.
Previously, parliament approved another agreement with the EBRD to mobilize approximately €49.6 million for reducing electricity losses in Sughd and Khatlon regions. Of this amount, €28 million will be provided as loans, with the remainder coming in grants.
The loan has a 20-year term, including a six-year grace period. The project covers nine electricity distribution network branches in the two regions and предусматривает replacing outdated equipment, installing modern metering systems and improving payment collection.
The program is scheduled for completion by 30 May 2030.
Tajikistan’s lower house of parliament has approved a loan agreement with the European Bank for Reconstruction and Development (EBRD) worth 10 million euros to modernise the electricity grid in Kulob and surrounding districts. The funds will be used to upgrade ageing infrastructure, introduce modern electricity metering systems and reduce technical and commercial losses, the parliamentary newspaper Sadoi Mardum reports.
Presenting the agreement, Tajikistan’s Finance Minister Fayziddin Qahhorzoda said the document was signed on 5 August 2026. According to him, the project aims to improve the reliability of electricity supply and reduce power losses in distribution networks.
After discussion in the relevant committees, deputies approved the document and adopted a corresponding resolution.
The additional financing is expected to allow the modernisation of Kulob’s electricity grid to continue, improve the reliability of power supply and reduce electricity losses.
What is planned in Kulob?
The project includes the modernisation of electricity distribution networks, the introduction of a modern billing system and the installation of automatic electricity metres. The Kulob energy system modernisation programme also includes the construction of a new 110/35/10 kV substation and the upgrade of an existing one.
The new metering systems will automate the collection of electricity consumption data and the calculation of payments. This is expected to help reduce commercial losses, improve billing accuracy and increase payment collection rates.
The EBRD Board of Directors approved the financing on 22 July 2026.
A continuation of a project launched several years ago
The current financing is a continuation of the project to reduce electricity losses in Khatlon Region, which the EBRD approved in November 2020. The original programme provided for the modernisation of electricity distribution networks in Kulob, Bokhtar and surrounding areas.
Its total cost was 36.4 million euros, including an EBRD loan of up to 20 million euros and a European Union investment grant of 15 million euros. The funds were directed towards upgrading low-voltage networks, constructing and modernising substations, and introducing automated electricity metering and billing systems.
In particular, the programme provides for the construction of a new and the reconstruction of an existing 110/35/10 kV substation in Kulob.
According to EBRD materials, the additional 10 million euros in financing will make it possible to expand the scope of work on upgrading distribution networks and installing modern metering equipment in Kulob and its surrounding areas.
Why is this necessary?
Electricity losses remain one of the main problems facing Tajikistan’s energy sector. They arise both from the technical condition of electricity networks, transformers and other equipment, and from shortcomings in consumption metering and payment collection.
At the same time, consumer debt for electricity, including debts from previous years, reached 3.835 billion somoni as of 1 June 2026. Of this amount, approximately 1.127 billion somoni was owed by the population, and 991.4 million somoni by the company TALCO.
The modernisation of electricity networks and the automation of metering should help reduce losses and improve the financial sustainability of electricity supply organisations.
Other funds are also being allocated to reduce energy losses
The modernisation of Kulob’s electricity grid is part of a broader programme to upgrade Tajikistan’s energy infrastructure.
It was previously reported that the country’s parliament approved another agreement with the EBRD to attract approximately 49.6 million euros to reduce electricity losses in Sughd and Khatlon regions. Of this amount, 28 million euros are loan funds, with the remainder provided in the form of grants.
According to information presented to parliament, the loan is provided for a term of 20 years with a six-year grace period.
The project covers nine branches of electricity distribution networks in the two regions. Under the project, it is planned to replace outdated equipment, introduce modern electricity metering systems and improve payment collection. Implementation of the programme is scheduled for completion by 30 May 2030.