After financing doubts last year, Tajikistan’s Rogun is on rise again

Construction on Tajikistan’s massive Rogun Dam project has taken significant steps forward over the last year, seeming to put to rest doubts about the project’s viability that had bubbled up last summer.

In June, the World Bank’s board of executive directors approved a $300mn grant for the project – its second round of funding, coming on top of a $350mn grant approved in December 2024. 

WeBuild Group (WBD: IM) , the Italian infrastructure conglomerate building the dam, announced in August that it had begun work on the $2.3bn Lot 2 of the project and raised the dam to a height of 1,155 metres above sea level. That will allow dam operators to raise the water level in the reservoir by 49 metres and expand the generation capacity of the two turbines (out of a planned six) already installed, the company said.

The Tajik government has been working on the Rogun Dam in the Vakhsh River Valley since 2016 and has already spent more than $3bn on the project, which, if built to its full specification of 335 metres high, would become the world’s tallest dam. The hydropower plant is projected to have a maximum generating capacity of 14,400 gigawatt hours of electricity annually, equivalent to around 60% of Tajikistan’s current production.

The recent advances came after reports in the Russian press and from S&P Global Ratings in late summer 2025 that the World Bank had “paused” its financing to examine objections from civil society groups and warnings about the dam’s fiscal viability.

In a statement made to Eurasianet on September 23, the World Bank Group Office in Tajikistan said that the dam’s financing could not be disbursed until certain agreed conditions were completed, which happened on December 22, 2025.

“There was no temporary suspension or freeze of the Bank’s participation in the project,” the bank told Eurasianet.

Tajikistan has hailed the recent construction progress.

“I am fully confident that in 2027 we will achieve energy independence,” Tajik Finance Minister Faiziddin Qahhorzoda told a news conference in Dushanbe on July 22, according to news outlet Asia-Plus.

The project is envisioned as a centrepiece of 73-year-old President Emomali Rahmon’s legacy. The government is hoping Rogun can produce enough power to earn electricity export revenues, as well as fuel industrial expansion and the development of a nascent artificial intelligence (AI). 

In a mid-August note, S&P estimated that the Tajik government still needs about $5.8bn to complete the project. The target completion date is presently 2035. 

The dam’s detractors have expressed dismay at Rogun’s continued rise.

Sceptics have long warned that the dam will cause extensive ecological harm and a harsh socio-economic impact on the 50,000 residents expected to be displaced by the reservoir. At the same time, filling the reservoir will require diverting large amounts of water from the already stressed Amu Darya River basin for several years.

“[The] new tranche of finance was accompanied by a significant reduction in financial conditions set on finalisation of environmental and social safeguards,” said Eugene Simonov, a coordinator at Rivers without Boundaries, an environmental NGO opposed to the project. “Once they release the second tranche, they will have no real strings to pull to control the borrower.”

In February of this year, the World Bank pledged to address civil society groups’ concerns in the latest round of consultations, Simonov told Eurasianet. But he said a lack of transparency and substantive moves from the bank has undermined the groups’ confidence in the process. 

“Directors acknowledged that the programme remains a high-risk, high-reward undertaking, which requires robust monitoring and oversight systems,” according to the chair’s summary of the board of executive directors meeting that approved the money. 

In addition to the World Bank’s new tranche of funds, the Abu Dhabi Fund for Development signed a loan agreement in early February for $100mn toward the current stage of the project. In late July, the Cassa Depositi e Prestiti, an investment organ of the Italian state, committed to a $150mn investment through the World Bank’s consortium.

The biggest question for the project now is a long-discussed $500mn investment from the European Investment Bank (EIB), and another potential $500mn in low-interest loans and grants from the Asian Development Bank (ADB).

The negotiations with the Europeans have reached their final stage, and Tajikistan is waiting for a decision from the EIB’s administration, according to Qahhorzoda, the finance minister. 

The European Union sees the dam as a way to increase its leverage in the region at the expense of Russia, which two decades ago seemed poised to take the lead on the project, Euractiv reported in June.

In all, the finance minister said that Tajikistan has secured $1.5bn in commitments from international funders. 

The momentum is due to “gang finance,” Rivers without Boundaries’ Simonov said. Smaller international financial institutions join in on “questionable” projects because they believe they can rely on the World Bank’s due diligence efforts, he said.

The Tajiks themselves continue to shell out from their own pocket as well. The country spent $400mn in government revenue on the project in the first half of the year, with another $300mn planned for the second half, the finance minister said.

Alexander Thompson is a journalist based in Bishkek, Kyrgyzstan, reporting on current events across Central Asia. He previously worked for American newspapers, including the Charleston, S.C., Post and Courier and The Boston Globe.

This article first appeared on Eurasianet here.