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    Tajikistan Power Risk/Reward Index


    May 25, 2022 - Fitch Solutions Sector Intelligence

     

      THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

      Tajikistan Power Risk/Reward Index

      • 25 May 2022
      • Tajikistan
      • Power

      Key View: Tajikistan remains firmly in the bottom half of our RR Index for the region. The country's poor performance due to its weak Industry Risks profile, with the score dampened by the poor competitive landscape, with a high level of state dominance as well as limited private participation in the power sector. On the upside, the country performs better on the Reward side of the matrix, with the score boosted by the large volume of installed capacity.

      Risk/Reward Snapshot
      Tajikistan & Emerging Europe Region - Power Risk/Reward Index

      Note: Scores out of 100; higher score = more attractive market. Source: Fitch Solutions Power Risk/Reward Index

      Global And Regional Ranks

      • Regional rank (out of 21): 15th
      • Global rank (out of 117): 76th

      Key Features And Latest Updates

      • Tajikistan’s power market is expected to expand rapidly over the next decade, in line with the gradual commissioning of the Rogun dam, and as a result the country scores particularly well for electricity capacity growth. This ensures that Tajikistan’s Industry Rewards score is favourable, outperforming the regional and global average quite considerably.
      • Tajikistan’s Country Rewards score is also fairly high, in line with the country’s positive macroeconomic and demographic fundamentals. This creates strong underlying demand for electricity, though in the short-term consumption has come under pressure from the Covid-19 pandemic, which has weighed on household and business demand.
      • Substantial challenges face prospective investors in Tajikistan, highlighted by the country’s poor Risks profile. The country’s lack of cost-reflective electricity tariffs, the inefficient and underdeveloped grid infrastructure, and limited access to finance serve to dampen investor interest in the market. Furthermore, the competitive landscape is dominated by state-owned Barki Tojik, making it difficult for new entrants to capitalise on the growth potential of the market.
      • Tajikistan’s Country Risks profile is the weakest among all the pillars of the Risk/Reward Index matrix, as political, economic and operational risks are extremely high. Notable threats to the long-term political environment include the autocratic leadership and uncertainty in the succession process, as well as persistent economic weakness and regional instability.
      • Furthermore, we expect Tajikistan's economy to suffer from Russia-Ukraine war fall-out. We at Fitch Solutions expect Tajikistan’s economy to contract by 3.1% in 2022 in the wake of the fall-out from Russia’s invasion of Ukraine and the sanctions that have followed.
      RRI Matrix Breakdown
      Tajikistan & Emerging Europe Region Power Risk/Reward Index By Component

      Note: Scores out of 100; higher score = more attractive market. Source: Fitch Solutions Power Risk/Reward Index

      This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

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