Work on the much-delayed 3,600-MW Soviet-era Rogun hydro dam in Tajikistan is resuming under a $3.5-billion deal with Milan-based Italian contractor Salini Impregilo S.p.A. Destined to be the world’s tallest dam, the 335-meter-tall earthfill structure will obstruct flows in the Vakhsh River, raising opposition in the cotton-growing downstream state of Uzbekistan.

Salini Impregilo this July secured a 13-year framework agreement with the Tajik state’s utility OJSC Rogun HPP to complete the project, which lies about 110 kilometers east of the capital Dushanbe, in phases. The company says it has secured a firm $1.75- billion deal to finish the dam and get two of its six 600-MW turbine units operational by August and October 2018, respectively.

Income from these generating units will help to fund the project’s remaining three construction packages covering left-bank structures, right-bank structures and final four generating units, according to Salini Impregilo.

Among the contractor’s first tasks will be to divert the river through two tunnels during the winter, when freezing mountain weather reduces water flows. The Italian team will make use of substantial underground facilities that were built since construction first started more than 30 years ago.

More than a third of the required 60 km of tunnels have been built, according to a 2014 World Bank–funded feasibility study. To handle diversion flows, a third tunnel should be built to augment the two already in place, reported the study team of Paris-based Coyne & Bellier, Italy’s Electroconsult S.p.A. and U.K.-based IPA Advisory Ltd.

Much of the remaining required underground space also has been built. The study team called for “mandatory and sophisticated remedial actions” for the permanent transportation and diversion tunnels and the powerhouse and transformer hall caverns. They considered the diversion-tunnel work to be most urgent, as they will be needed early. Also urgent is work to reinforce the powerhouse and transformer hall caverns, which are not safe enough to resume excavation work, reported the engineers.

Conceived in the 1950s, when hydro-rich Tajikistan was part of the Soviet Union, the Rogun was to be the uppermost dam on a hydropower cascade along the Vakhsh river. Of the plants built in that plan, the most important is the 3,000-MW Nurek, about 70 km downstream of Rogun. At 300 m, the Nurek holds the world height record: It is 38 m taller than the next tallest, Mexico’s Manuela Moreno Dam, according to the International Commission on Large Dams.

Rogun’s construction began in 1982 and halted in 1991 with the dissolution of USSR, according to World Bank records. Two years later, a diversion cofferdam on the river was destroyed by floods, which also damaged tunnels. At that time, the cofferdam was 40 m tall, according to the Uzbek government. The Tajiks began rehabilitating the project in 2008, but that work stopped four years later.

For Tajikistan, the Rogun represents a major asset that has the potential for exporting electricity to energy-poorer neighbors, such as Afghanistan and Pakistan. According to the International Hydropower Association, Tajikistan’s 5,190 MW of installed hydro capacity in 2014 met the total electricity needs of the country’s 8.5 million people, who generate a per capita GDP of $2,700, says the World Bank.

But Tajikistan’s hydro wealth represents a threat to agricultural production farther downstream, claims the Uzbek government. Uzbekistan relies on upstream river flows to water its cotton crop. The fiber generates 60% of export earnings and provides work for 45% of the population, notes a report to the European parliament. Rogun’s reservoir would need 16 years to fill, reducing downstream flows all the while, the report adds.

Responding to this year’s resumption of construction, the Uzbek government urged Tajikistan to reconsider. In July, the Uzbek foreign ministry implored its northern neighbor to replace the mighty Rogun with “small and medium hydropower plants, using numerous rivers and water resources in Tajikistan.”