CASA-1000: POWERING TAJIKISTAN INTO A REGIONAL ENERGY HUB

FROM HYDROPOWER TO REGIONAL HUB

 

For a landlocked country of less than ten million people, Tajikistan’s ambitions in the energy sector are strikingly global. At the heart of this vision lies CASA-1000, the Central Asia–South Asia electricity transmission project designed to export Tajikistan’s abundant summer hydropower to Afghanistan and Pakistan. Once fully operational, CASA-1000 will allow Tajikistan to export up to 11 billion kilowatt-hours (kWh) of clean electricity annually to South Asia, while advancing the government’s own target of raising overall power exports to 10 billion kWh by 2030. For Tajikistan, the project is more than just an infrastructure build—it is the cornerstone of a new economic model that links energy security, foreign exchange earnings, and regional diplomacy.

 

PROJECT BACKBONE

 

CASA-1000 is a $1.2 billion initiative supported by the World Bank, Islamic Development Bank, USAID, and several bilateral partners. Construction of the transmission lines on Tajik and Kyrgyz territory has been completed, with Pakistan’s portion nearly finished and funding for Afghanistan recently reactivated by the World Bank. Commercial operations are projected to begin by 2027, delivering renewable electricity from Tajikistan and Kyrgyzstan to meet peak demand in South Asia.

 

The technical scope is immense: a 500-kilovolt alternating current line from Kyrgyzstan to Tajikistan, a 1,300-kilometer high-voltage direct current line from Tajikistan through Afghanistan to Pakistan, and converter stations that allow seamless power flow across diverse grids. For Tajikistan, this infrastructure locks in a long-term export outlet for surplus summer electricity, turning what was once seasonal oversupply into hard currency earnings. It also positions the country as a strategic anchor in the emerging Central Asia–South Asia energy corridor.

 

DOMESTIC TRANSFORMATION

 

While CASA-1000 is outward-facing, its benefits at home are equally significant. Tajikistan is already one of the world’s most hydropower-intensive economies, with 95% of electricity generated from water. Yet less than 5% of its total hydropower potential is currently tapped. CASA-1000 provides a commercial rationale for expanding capacity, encouraging new investments in projects such as the Rogun hydropower plant and smaller run-of-river schemes.

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The transmission project also intersects with Tajikistan’s broader modernization agenda. The government’s National Development Strategy to 2030 sets a target of cutting electricity losses to 10% nationwide. Smart metering projects in Dushanbe and Khujand have already brought losses below 8%, saving millions in revenue and reducing financial stress on utilities. CASA-1000 reinforces these reforms by demanding internationally accepted operational standards, grid management, and financial transparency—steps that create a more bankable investment environment.

 

Moreover, CASA-1000 catalyzes grid reliability. Tajikistan recently rejoined the Central Asian Power System after a decade of isolation, restoring synchronous electricity flows with Kazakhstan, Uzbekistan, and Kyrgyzstan. This reintegration strengthens Tajikistan’s resilience to seasonal fluctuations in water availability while unlocking new balancing opportunities for renewables like solar and wind.

 

REGIONAL IMPACT

 

CASA-1000 is not just an infrastructure project; it is a diplomatic bridge. By linking the energy markets of Central and South Asia, it addresses two structural mismatches: Tajikistan’s summer surplus and Pakistan’s summer deficits. Afghanistan, meanwhile, benefits from transit fees and access to electricity that can stabilize its fragile grid.

 

The geopolitical significance is profound. For decades, Central and South Asia have remained economically disconnected despite geographic proximity. CASA-1000 breaks this pattern, demonstrating how shared infrastructure can foster trust and interdependence. It enhances Tajikistan’s role as a responsible regional actor, complementing its leadership on global water diplomacy and its efforts to host climate-related international conferences.

 

For international development partners, the project is a template for cross-border cooperation in a fragmented world. It also aligns with global climate goals by replacing fossil-fuel-based generation in South Asia with clean hydropower, cutting millions of tons of carbon emissions annually. The reputational gains for Tajikistan are equally important: a small state positioning itself as both an energy supplier and a stability provider in its neighborhood.

 

INVESTOR OUTLOOK

 

CASA-1000 is both a risk-managed entry point and a platform for broader engagement. Multilateral financing has de-risked much of the initial build, creating space for private capital in ancillary sectors. Hydropower modernization is one immediate opportunity: more than half of Tajikistan’s installed capacity comes from Soviet-era plants in need of rehabilitation, offering returns through efficiency gains and expanded generation.

 

Export-ready transmission is another area of focus. With CASA-1000 setting the precedent, additional lines to Uzbekistan, China, or further into South Asia are conceivable, especially as demand for green electricity accelerates. Investors can also explore energy service contracts, grid digitalization, and storage solutions that will be required to balance seasonal hydropower flows.

 

Climate adaptation adds a third layer of opportunity. Tajikistan’s energy system is vulnerable to glacier retreat and hydrological volatility, but international programs are funding resilience measures—from dam safety upgrades to irrigation-energy nexus projects. Green finance instruments, including Tajikistan’s first green bonds issued in 2023, can channel private investment into such initiatives while meeting ESG mandates.

 

CASA-1000’s ripple effects extend beyond energy. Reliable export revenues strengthen the balance of payments, stabilizing the currency and creating room for fiscal reforms. This macro stability, in turn, benefits foreign investors across sectors—whether in mining, agriculture, or infrastructure—by reducing country risk.

 

WHY THIS MATTERS TO INVESTORS

 

For investors, CASA-1000 is more than an energy project—it is a structural shift in Tajikistan’s role within regional power markets. The $1.2 billion initiative, backed by the World Bank, Islamic Development Bank, and other development partners, will enable Tajikistan to export up to 11 billion kWh annually to Pakistan and Afghanistan while boosting total electricity exports to 10 billion kWh by 2030. This new transmission corridor transforms Tajikistan from a hydropower-rich but landlocked country into a regional energy bridge linking Central and South Asia.

 

The implications for private capital are significant. The project creates a pipeline of bankable opportunities across generation, transmission, and industrial off-take. New hydropower, solar, and wind projects will be developed to feed the export corridor. Complementary grid and substation upgrades will be required to ensure stability and efficiency. At the same time, low-cost renewable power will make Tajikistan more attractive for energy-intensive industries such as mining, data centers, and manufacturing.

 

CASA-1000 offers de-risking benefits. Multilateral involvement ensures governance and financial discipline, while reintegration into the Central Asian power system enhances reliability. As global demand for clean energy exports accelerates, Tajikistan is positioning itself as a first mover in the region.