Bottlenecks of hydropower development in Central Asia: Failure of aid coordination by development banks

Abstract

The Central Asian countries have abundant but unevenly distributed natural resources including water. The Central Asia Power System (CAPS) project initiated by the Asian Development Bank and the Central Asia-South Asia Electricity Transmission and Trade Project (CASA-1000) initiated by the World Bank are planned to catalyze trade of electricity in this region. However, the existing surplus of the hydropower generation capacity of Tajikistan in summer may only meet the anticipated power demand by one project. The CAPS project (to be completed in 2023) may monopolize the surplus in Tajikistan and the CASA-1000 project (to be completed later) may suffer from the shortage of electricity. It stems from the failure of aid coordination between the Asian Development Bank and the World Bank. This study reveals (a) how the assumptions made for the CAPS and CASA-1000 projects differ, and (b) possible causes of the failed aid coordination. It turned out that (a) the officer in a development bank who is in charge of project development has little motivation to submit his or her project to aid coordination, (b) only “geographic demarcation” between two projects was discussed and agreed upon in the aid coordination, and (c) no technical detail of these projects was discussed in the aid coordination.