Starting from April 1, electricity prices in Tajikistan have increased once again.  Residential customers now pay 15% more for electricity than they did previously.  Experts believe the tariff hike is a result of the sector's unprofitability.  The cause of this unprofitability is cross-subsidization.  This is when, essentially, you pay a lot while your neighbor pays nothing.

Starting from April 1 the new tariffs are:

• For residential customers: 35.36 dirams per 1 kWh, up from 30.75 dirams.  Additionally, if a residential customer exceeds 10,000 kWh per month, he/she will have to pay 2.3 times more for each additional kilowatt—80.90 dirams.
• For federally funded institutions, municipal organizations, and sports complexes: 35.36 dirams, up from 26.51 dirams.
• For drinking water and irrigation pump stations: April 1 – September 30: 12.27 dirams, up from 9.2 dirams; and October 1 – March 31: 35.36 dirams, up from 26.51 dirams.
• For land reclamation and irrigation stations: 12.27 dirams, up from 9.2 dirams.
• For water supply and sewage pump stations (excluding individual pumps): 16.81 dirams, up from 12.6 dirams.
• For Tajik Metallurgical Plant: May 1 – September 30: 14.19 dirams, up from 10.64 dirams; and October 1 – April 30: 80.90 dirams, up from 60.65 dirams.
• For non-budget educational institutions: 60.70 dirams, up from 45.51 dirams.
• For Tajik Aluminum Company (TALCO): 20.77 dirams, up from 15.57 dirams.
• For Joint Stock Company (JSC) Azot (fertilizers plant): 35.36 dirams.
• For textile enterprises: 40.45 dirams.

Until 2016, electricity rates only increased in even years, after that they have increased annually.  The exceptions were 2020 and 2021 when the government refrained from such hikes due to the consequences of the COVID-19 pandemic.  After that, electricity for the population became 56% more expensive (from 22.66 dirams to 1 October 2022).

Over the last 15 years, the cost of electricity for residential customers has nearly quadrupled (from 9 dirams per kilowatt in 2010).

Is it true that our electricity rates are still low?

Tajik energy authorities have previously linked each increase in electricity tariffs primarily to recommendations from international financial institutions.  They claim, "It's not our fault; these are the conditions of our financial donors."  They also argue that our electricity rates are too low—among the lowest in Central Asia—and do not cover the costs of electricity generation, transmission, and distribution.

But is this really true?  It's true that residents of Kazakhstan and Uzbekistan pay more for electricity than we do. However, it’s important to understand that 80-90% of electricity in these countries is generated by thermal power plants, which purchase and use other energy sources (natural gas, coal, fuel oil) to generate electricity.

In Turkmenistan, most of the electricity is also produced by thermal power plants. However, the average electricity rate tariff for residential citizens (both legal and natural persons, except foreigners) in November 2017 was 0.0581 manat (1.6 cents at the exchange rate of the Central Bank of Turkmenistan as of November 2017).  There have been no reports on changes in tariffs in this country since then.

In Tajikistan, nearly 95% of electricity is generated by hydroelectric power stations, which, as is known, use free water (only the so-called royalty tax is paid).

The costs for electricity generation at thermal stations, according to experts, are at least 4-6 times higher than the costs of generation at hydroelectric plants.

As mentioned earlier, residents of Tajikistan pay 3.2 cents per kilowatt-hour.

The only country in the region where most electricity, like in Tajikistan, is produced by hydroelectric power plants is Kyrgyzstan (around 90%).

Currently, according to the Kyrgyz Ministry of Energy, residential customers in Kyrgyzstan pay 1.11 soms (about 1.3 cents) per kilowatt-hour for consumption up to 700 kWh per month.  Any excess above this amount costs 2.39 soms (2.8 cents) per kilowatt.  It's important to note that exceeding 700 kWh per month for a household is difficult unless you're involved in cryptocurrency mining or other income-generating activities.  In practice, each kilowatt for a Kyrgyz residential customer costs 2.5 times less than for a Tajik consumer.

This leads to a reasonable question: why is 1.3 cents considered acceptable for Kyrgyz energy companies, while 2.8 cents is not enough for Tajik ones?

Moreover, Tajikistan's population has lower purchasing power compared to Kyrgyzstan.  The average monthly salary in Kyrgyzstan in January of this year was US$455, while in Tajikistan, it was US$270.

Experts link the financial insolvency of Tajikistan's energy sector, and consequently the regular increase in electricity prices, to two main problems that have not been solved for decades: 1) cross-subsidization and 2) high levels of losses.

Cross-subsidization is a form of price discrimination where low tariffs for one group of consumers are compensated by higher tariffs for others.

In this way, the once-dominant Tajik Aluminum Company (TALCO), which has been a major part of Tajikistan's economy for decades, continues to be supported.  In the final years of the Soviet Union, the aluminum smelter accounted for up to 20% of the country’s budget revenues.  In the current Tax Code, effective since January 1, 2022, the sales tax on aluminum was reduced to 1% from 3% in the previous code.

Despite nearly eight months of acute electricity shortages, TALCO remains the largest consumer of electricity (10% of the country's total energy production). It receives each kilowatt-hour at a subsidized rate of 20.77 dirams.

In comparison, other industrial enterprises pay 80.90 dirams per kilowatt-hour, and residential customers pay 35.36 dirams.

Moreover, this company has been able to avoid paying for the electricity it consumes even at these discounted rates.  According to the Tajik Electricity Distribution Network, TALCO's debt for electricity increased by nearly 220 million somonis (US$20.2 million) in 2024, reaching a total of 571.5 million somonis (US$52.6 million) as of January 1, 2025.

Other beneficiaries of subsidies include the Tajik Metallurgical Plant, which, during the spring-summer period (from May 1 to September 30), pays only 14.19 dirams per kilowatt-hour, and 80.90 dirams during the fall-winter period (from October 1 to April 30, like other industrial enterprises).

Last autumn, the state also extended subsidized rates to the producer of mineral fertilizers, OJSC "Azot," which pays 2.3 times less for electricity than other industrial enterprises. Subsidized rates are also applied to pumping stations.

As for the high level of losses, according to the country’s Ministry of Energy and Water Resources (MoEWR), electricity losses in Tajikistan's energy system in 2024 amounted to about 4.5 billion kilowatt-hours (excluding imports), or 20% of production.  This means that every fifth kilowatt of electricity produced in the country is lost.

Experts estimate that the losses during electricity generation and transmission, which energy companies categorize as technical losses, are relatively small—below 4%.

However, electricity is lost in large volumes during distribution, which is categorized as commercial losses—i.e., theft.

A MoEWR emphasizes that projects are underway in cities such as Dushanbe, Panjakent, Istaravshan, Isfara, Konibodom, Buston, Kulob and Bokhtar as well as Danghara district to reduce losses.  Additionally, the ministry expects that by 2027, all consumers in the country will be equipped with smart meters.

The total debt in the energy sector (including loans attracted for investment projects) amounts to around 40 billion somonis, or 26% of last year's GDP.

On April 2,  Tajikistan’s lower chamber (Majlisi Namoyandagon) of parliament   approved amendments to the Criminal Code, which are aimed at strengthening accountability for the illegal use of electricity.