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ADB Approves $110 Million Grant to Enhance Power Supply in Afghanistan

www.adb.org/
30 September 2020

KABUL, AFGHANISTAN (30 September 2020) — The Asian Development Bank (ADB) today approved a $110 million grant to boost power supply and strengthen Afghanistan’s energy sector by improving its sustainability and promoting cross-border trade in energy.   

The project will help address Afghanistan’s chronic power shortage by immediately doubling the volume of power imports and ensuring long-term cost-competitive electricity supply. It will facilitate the Afghan system’s first parallel (synchronous) operation with the Uzbek system and the Central Asia Power System (CAPS). Once complete, the project will provide improved access to customers and facilitate 500,000 new connections to households, commercial entities, and industrial customers.

“Demand for electricity is growing rapidly in Afghanistan and is essential for the country’s economic growth,” said ADB Energy Specialist Nana Gurgenidze. “The project will help provide reliable and affordable electricity to households and businesses by strengthening the grid and increasing power import capacity by 900 megawatts, with year-round firm energy imports of 3,000 gigawatt-hours.”

Afghanistan relies on energy imports from neighboring countries to meet its domestic demand. Despite significant progress since 2002, only about 34% of the population has access to grid-connected electricity.

The project will finance the construction of 201 kilometers of a 500-kilovolt overhead transmission line from the Surkhan substation in Uzbekistan to the Khwaja-Alwan substation in Afghanistan—a key interconnection node to receive power from Tajikistan, Turkmenistan, and Uzbekistan. It will also fund the expansion of a line bay, including associated equipment, at the Khwaja–Alwan substation. The project will allow Uzbek power into the Afghan grid under a 10-year power purchase and sales agreement signed in August 2020 by the Afghanistan and Uzbekistan governments.

Under the project, staff, including female engineers at the national power utility Da Afghanistan Breshna Sherkat (DABS), will be trained to manage cross-border power transfer and parallel operations, including emergency operation systems with CAPS.

The project is aligned with the government’s priority programs in the energy sector, ADB’s Strategy 2030, and the Central Asia Regional Economic Cooperation Program’s Energy Strategy 2030. It is also aligned with ADB’s Afghanistan Country Partnership Strategy, 2017–2021, which aims to prevent worsening poverty and establish a stronger foundation for inclusive and sustainable growth.

ADB’s is one of Afghanistan’s largest on-budget development partners in the energy sector with cumulative commitments of $1.77 billion in grants since 2002. The project is financed from ADB’s Special Funds resources and is part of an overall $1.2 billion Energy Supply Improvement Investment Program (2015-2024).

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.