Riyadh and Dushanbe to implement investment projects in energy, industrial and mining sectors

Tajik Minister of Investments Sultan Rahimzadeh revealed ongoing efforts with Saudi Arabia to find mechanisms for implementing investment projects in Tajikistan’s energy, industrial and mining sectors. He pointed to the signing of 14 agreements and memoranda of cooperation in the areas of economy, investment, science, education, air transport, youth, sports, security and combating crime.

In an interview with Asharq Al-Awsat of Riyadh, Rahimzadeh said: “Currently, there are 12 draft new agreements and memorandums of understanding on cooperation between the two countries that are ready to be signed. In addition, 15 draft bilateral agreements are also being analyzed and are to be signed during the upcoming official visit of the President of Tajikistan to the Kingdom.”

The Minister noted that the Saudi-Tajik agreement on the encouragement and mutual protection of investments is an important legal basis for attracting Saudi investors to Tajikistan and protecting their rights and interests.

He stressed that his country is ready to conclude separate investment protection agreements with private sector companies to invest in priority sectors.

He continued: “Saudi Arabia is contributing to the implementation of infrastructure development projects in Tajikistan through the Islamic Development Bank, the Saudi Development Fund and other international financial institutions, as the volume of financing of the Saudi Development Fund for development and infrastructure projects in Tajikistan the country has reached about $270 million in based on soft loans.

Close ties

Rahimzadeh stressed the strong religious, cultural and historical ties between Saudi Arabia and Tajikistan, dating back many centuries.

“Thanks to the political will of the leaders of both countries, relations have been strengthened and reached the highest level. We are currently working to raise the level of economic, trade and investment cooperation in the framework of implementing the directives of both leaders,” he said.

The minister stressed the importance of the joint government committee, which he co-chairs with Saudi Minister of Investments, Eng. Khaled Al-Falih.

Rahimzadeh added that during the Tajik-Saudi Investment Forum, which was held for the first time in Dushanbe in December 2022 on the sidelines of the joint committee meetings, agreements were signed to strengthen public-private sector partnerships in the field of bilateral investments.

“We are excited about the opportunity to align the activities of the Joint Committee on the Strategic Economic and Trade Partnership with the strategic goals of the national development of our two countries for 2030. We look forward to intensifying the work of the Joint Business Council, as well as organizing periodic economic and investment forums dedicated to agricultural and industrial products,” he told Asharq Al-Awsat.

He pointed out that the volume of trade is not proportional to the capabilities and opportunities of both sides, which requires increasing the level of trade and removing obstacles and logistical problems.

The minister highlighted his government’s efforts to encourage the Saudi public and private sectors to invest in Tajikistan’s projects in the renewable energy, mining, industrial and agricultural sectors to ensure sustainable economic development.

“The development of cooperation in tourism is mutually beneficial,” he said, adding that the government had exempted Saudis from entry visas from the beginning of 2022, while Tajik national carrier Somon Air launched direct flights between Dushanbe and Jeddah in March 2023 to strengthen bilateral economic, trade and tourism cooperation.

Investments in the Gulf and Asia region

Rahimzadeh said that on May 29, Riyadh hosted the Gulf Cooperation Council (GCC)-Central Asian Countries Investment Forum under the Joint Action Plan for Strategic Dialogue and Cooperation between the two sides for 2023-2027.

“The results of the forum will serve as an action plan to activate economic, trade and investment cooperation between the two parties,” he noted.

Referring to Tajikistan’s cooperation with the countries of the Persian Gulf and Central Asia in 2023-2027, Rahimzadeh said that strengthening multi-faceted relations with the member states of the Gulf Cooperation Council is one of the important directions of his country’s foreign policy.

He added: “We stand ready to boost mutually beneficial cooperation in various economic, trade, investment, cultural and areas of mutual interest under the Joint Plan of Action for the Gulf States and Central Asia 2023-2027.”

Investment opportunities

Rahimzadeh emphasized that his country has huge potential in the field of hydropower, pointing to the construction of a number of stations with different capacities and the comprehensive development of the “green energy” sector. He also addressed the establishment of joint projects to produce environmentally friendly agricultural products for export to Gulf markets.

He said his country had developed and modernised regulations on investments, contracts, free economic zones and public-private partnerships, taking into account best practices in law enforcement.

He revealed that in Central Asian countries, only Tajikistan had a law on investment contracts, according to which an investor has the right to obtain additional incentives and privileges.

Rahimzadeh said: “We have introduced a complete system of tax exemptions, except for social tax, income tax and customs duties. Our free economic zones provide a business platform ready to implement various projects, and we are gradually moving towards supporting a comprehensive business infrastructure.”

He added: “The government in the country’s development strategy until 2030 also identified the development of the private sector, entrepreneurship and investment as the main means of achieving national goals and is constantly taking the necessary actions to create favorable conditions for conducting business and investment activities.”

“Green economy” by 2037

Rahimzadeh emphasized that his country will become a “green economy” by 2037, noting that among its strategic goals is the accelerated industrialization of the country, which will help promote sustainable development and create jobs.

The minister also emphasized his country’s competitive advantage, such as transport capabilities and the availability of skilled and relatively cheap labor, which creates great potential for tourism development.

He stressed that the Government of Tajikistan attaches exceptional importance to continuing the process of institutional reforms in order to create a more favorable investment climate and improve the business environment.