A small number of state-owned enterprises dominate Tajikistan's industrial sector. The government's post-independence plans to extensively privatize industry have been hampered, first, by the five-year civil war 1992–1997, and then by the effects of the Russian financial crisis in mid-1998 that have put concerns about financial stability ahead of privatization. By early 1992, the state accounted for about 84% of asset ownership in the industrial sector, as compared to a high of 98% in the late 1980s. The civil war damaged an already weakly developed industrial sector, and basic security remains a concern. Industry in Tajikistan consists in sum of one large aluminum smelter, hydroelectric power installations and a number of small plants engaged in light industry and food processing. Virtually all are in need of upgrading and modernization.
Tajikistan's aluminum plant, the Tursunzade Aluminum Smelter (TADAZ), built in 1975 and located in Tajikistan because of access to cheap electric power, is the third-largest in the world, with a capacity of 517,000 tons a year. In 2001, it was operating at 25% capacity (producing 113,000 tons), down from 86.5% capacity in 1990 (producing 450,000 tons, the closest it has come to full capacity utilization.) The $210 million earned in export revenues constituted 53% of total export receipts for the year. In 202, TADAZ's output increased to 307,000 tons, and plans are for it to reach 346.000 tons annual output by 2005. Almost all of its output is exported, though there are small downstream cable and foil operations. The plant directly employs 12,000 to 14,000, and indirectly supports a community of 100,000. The government announced its intention to sell shares in TADAZ, retaining a majority control. However, the plant has accumulated a large external debt, probably over $100 million, lessening its attractiveness to outside investors. In early 2003, the IMF somewhat uncharacteristically advised against privatization of either TADAZ or the country's hydroelectric facilities.
Tajikistan is the world's third-largest producer of hydroelectric power, behind the United States and Russia. However, TADAZ uses about 40% of the country's electricity production, and Tajikistan has the lowest electricity usage rates among the former Soviet counties, enough for only a few hours a day of electricity in the winter. Furthermore, only about 5.5% of its hydroelectric power production potential has been developed. In 2001, only 16.5 billion kiloWatt hours per year (kWh/y) out of a potential 300 kWh/y were produced, 3.9 billion kW/y of which were exported. About 12 power projects are at some stage of construction but most are stalled for lack of financing. The energy shortage in turn has shut down much of the country's industry. About 85% of Tajikistan's current hydroelectric power is produced by stations along the Vakhsh River. The largest of these is at Nurik (11 billion kWh/y capacity. A larger facility (13.3 billion kWh/y) at Rogun on the Vakhsh is unfinished because of lack of financing related to concerns about both security and vulnerability to earthquake. If completed, the Rogan Dam would be the tallest in world at 335 m (1,105 ft). Even larger, although only in the planning stage, is a 14.8 billion kWh/y facility for Dashtijum on the Panj River along the Afghan border.
The production, transportation and distribution of electricity is under the state-owned joint-stock company Barki Tojik. Light industry includes the Tokof 1997, the government was in the process of privatizing Glavkhlopkoprom, the state organization that controls the ginning and partly the selling of cotton fiber. In 2000, 18 cotton ginneries were sold at two auctions, bringing in a disappointing $9 million. The food industry is the second-largest contributor to gross industrial output, processing domestically harvested fruit, wheat, tobacco, and other agricultural products. Aside from aluminum and other processed metals, the country's small intermediate and heavy industry subsectors produce engineering goods, hydroelectricity, power transformers, cables, and agricultural equipment.