ADB Power Project to Boost Afghanistan North-South Link

News Release | 26 November 2013

MANILA, PHILIPPINES – The Asian Development Bank (ADB) has approved a $159 million grant for a power transmission project to help Afghanistan overcome shortages in key areas and ultimately aid its push to become an exporter of surplus electricity to neighboring countries.

“Kabul and the provincial capitals in all eastern and southern provinces suffer load shedding because of power shortages and this is undermining growth and fueling ethnic and regional tensions,” said Klaus Gerhaeusser, Director General of ADB’s Central and West Asia Department. “This project will form part of a broader ADB-backed initiative to help get power to underserved areas and allow Afghanistan to become part of an energy resource corridor connecting Central Asia’s power systems with those of South Asia.”

The North-South Power Transmission Enhancement Project will build a 550-kilovolt (kV) transmission line straddling 225 kilometers across the Hindukush mountain range from the northern town of Dashte Alwan to Kabul in the south. It will include a substation connecting to the grid in the capital, Kabul. It will also complement a separate 500-kV substation to be built in the north by ADB under its Energy Sector Development Program.

Once domestic generation projects are complete in the north of the country, the ADB-assisted infrastructure will transmit the additional electricity to the south, with any surplus to be exported to Pakistan through a planned link connecting the two countries’ grids.

Afghanistan, which imports the vast bulk of its energy needs, has seen power demand in major centers grow at 25% per year. At the same time, it has 10 isolated power grid “islands” fed from different sources, and this creates system inefficiencies, increases operational costs, and reduces the reliability of supplies. Currently the only transmission line connecting northern Afghanistan to the south is a 220-kV line with 300 megawatts capacity. The new link will add up to 1,000 megawatts, furthering the country’s objective of increasing its electrification rate, which stood at just 25% in 2012.

The project will support the Central Asia Regional Economic Cooperation (CAREC) Program’s broader strategic goal of increased cross border power exchanges and links to South Asia. Afghanistan is one of 10 countries in the CAREC program, which also has six multilateral development partners, including ADB.

ADB’s assistance will come from its Asian Development Fund, with cofinance of $57 million from the ADB-administered Afghanistan Infrastructure Fund, which includes contributions from the governments of Japan, UK and US. The Government of Afghanistan will contribute $4 million for a total investment cost of $220 million, with the project due to run for about 2.8 years with an estimated completion date of December 2016.