Afghanistan: MFF - Energy Sector Development Investment Program - Tranche 1

Sovereign Project | 42094-022 Status: Approved


ADB is helping Afghanistan develop and rehabilitate energy facilities as well as build the institutional capacity of the power utility. The project will rehabilitate gas fields in Sheberghan, build a 220-kV transmission line from Kunduz to Taloqan, and develop distribution systems in Kunduz and Baghlan. 

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Procurement Documents

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Project Name MFF - Energy Sector Development Investment Program - Tranche 1
Project Number 42094-022
Country Afghanistan
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0134-AFG: MFF - Energy Sector Development Investment Program - Tranche 1
Asian Development Fund US$ 164.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Energy - Electricity transmission and distribution - Oil and gas transmission and distribution - Renewable energy generation - small hydro

Gender Equity and Mainstreaming No gender elements

Scope: The tranche 1 ($164 million) of Energy MFF comprises of following sub-projects:

(i) NEPS 220 kV transmission line (Kunduz - Taluqan) -- $27.8 million - construction of a 67km double circuit 220kv transmission line linking cities of Taluqan to Kunduz.

(ii) NEPS distribution network in Kunduz and Baghlan -- $51.3 million - development and rehabilitation of 20kv and low voltage networks for 45,000 households in Kunduz and Baghlan cities

(iii) Rehabilitation of Sheberghan gas wells in 2 phases -- $21.8 million - rehabilitation of dilapidated gas wells in Shiberghan to enable extraction of domestic gas to power future gas fired power generation in Jawzjan province.

(iv) NEPS 220kv system operation and maintenance (O&M) emergency equipment -- $19.0 million - Consulting services to assist the operation and maintenance of the newly constructed 220kv NEPS. Procurement under process.

(v) Project management and implementation for tranche I & II -- $23.0 million - Consulting services to assist the management of projects in DABS.

(vi) Future sub-projects' preparation -- $5.3 million

(vii) Individual consultants -- $0.5 million

(viii) Implementation supervision Gas wells rehabilitation and capacity building of Ministry of Mines -- $1.2 million - design and supervision consultancy

Project Rationale and Linkage to Country/Regional Strategy The Afghan Energy Sector Development Investment Program aims for improved energy security and sustainable power supply to stimulate economic development in Afghanistan. Ths investments would reduce cost of doing business, cut poverty and improve security. It aims to provide sustainable cost effective power supply in North East Afghanistan (including Kabul) through (i) Improvements in transmission and distribution systems, and (ii) Strengthened institutional capacity of power utility's (DABS) commercial, technical and managerial functions (MIS, financial/revenue management, O&M capabilities, system planning, and project management).
Impact Sustainable and reliable grid connected power supply in north east Afghanistan.
Project Outcome
Description of Outcome Stable power supplies in Taluqan, Kunduz and Baghlan and additional gas production at Sheberghan.
Progress Toward Outcome

i) The actual construction work of physical projects began from January 2012 and expected to be completed by end 2016. These projects would supply power to some 45,000 new households/commercial/industrial users, build new transmission lines, and would increase the per capita energy usage to boost economic opportunities, improve environment and cut poverty in Afghanistan.

ii) In conjunction with other development partners, these projects would expand energy supply in the northern and eastern parts of Afghanistan and connecting remote areas with NEPS grid.

iii) These projects aim to build substantial capacity of the newly established power utility DABS.

iv) The project rehabilitated already 6 gas wells in Sheberghan and increased the production of gas to about 1.3 mln. cubic meters per day. All wells have been connected to the gathering and transportation system. The gas will be transported to the existing power plant and fertilizer plant in Mazar e Sharif after USAID completes construction of the pipeline. On 25 October 2014 the EA submitted a proposal on scope of works for the 2nd phase of wells rehabilitation. The IFB has been announced and deadline for bid submission was 24 August 2015 and expected date of contractor mobilization at the site (Sheberghan gas field) early January 2016.

Implementation Progress
Description of Project Outputs

Rehabilitation of 8-12 gas wells in Sheberghan

Evacuation of power in NEPS area through Kunduz Taloqan transmission line

Development of distribution systems in Kunduz and Baghlan load centers

Stabilization of NEPS operations and maintenance (O&M) system instituted for efficient functioning of grid.

Improvement of DABS operations and management capacities

Status of Implementation Progress (Outputs, Activities, and Issues)

The contract for rehabilitation of 8 gas wells in Yatimtaq and Jerguduq was awarded to Turkish Petroleum Company on 16 Oct 2012. The works started from February 2013 and completed in March 2014. Six out of 8 wells were successfully rehabilitated producing 1.2 million cubic meters of gas every day. Rehabilitation of remaining 2 wells was technically impossible because of high corrosion of their production tubings. Therefore the wells have been pluged and abandoned. The EA has finalized the bidding documents for the second phase of wells rehabilittion which inclde wells number 31 and 37 in Yatimtaq. The balance funds of $14 million under the project wll be utilized for this work. Bidding documents has been issued 07 July 2015 and work is expected to be awarded in Q4 2015 and contractor mobilized in January 2016.

Kunduz - Taloqan T/Line contract was awarded on 18 Dec 2011 and physical work has been 100% complete as of 31 December 2013. The line was inaugurated on 15 January 2014 and is now operational.

As per reconnaissance study undertaken by project consultant, the revised number of connections are estimated to be around 45,000. Contract for distribution networks in Kunduz and Baghlan (EPC) was signed between DABS and CNEEC and Maamaar JV on 6 January 2013 and initial work began from May 2013. The project is under implementation with 25% equipment on site and survey for additional villaes is on-going. The project is expected to be completed by June 2016.

Substantial progress has been achieved. NEPS losses currently stand at 39%. With installation of new electronic meters, commercial losses has been reduced by more than 50% in major load centers. AB, world Bank and USAID are working in tandem to improve system stability.

With substantial donor support confirmed throughout 2016 and ADB's next project to be possibly approved in Q4 2014 it is envisaged that DABS will be able to develop adequate capacity to independently manage its assets and projects by 2017.

Geographical Location Taloqan, Takhar Province,Sheberghan, Jawzjan Province,Kunduz Province,Baghlan Province
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The tranche has been categorized as category B in terms of its environmental impacts. The environmental impacts of the project have been considered to be insignificant and thus the requirement is to prepare and implement IEE for this tranche subprojects.

An updated IEE for the Kunduz - Taloqan Transmission line has been submitted by the EA and approved by ADB. The IEE and EMPs were uploaded in the ADB website for public disclosure. The other subproject of this tranche i.e. the distribution network component at Baghlan and Kunduz is still in detail design stage (Final stage).

Involuntary Resettlement

Tranche 1 projects have been categorized as Category B. Two projects in tranche 1 involve low-intensity LAR are (i) NEPS 220 kV Transmission Line: Kunduz Taloqan; (ii) Construction of distribution netwroks in Baghan and Kunduz. Updated Land Acquisition and Resettlement Plans, based on detailed/final design, have been prepared for the 3 Small Hydropower Plants and have been submitted to ADB for review. ADB's comments have been communicated back with the consultant to be incorporated for further steps i.e. approval, disclosure and implementation.

Also, an updated Land Acquisition and Resettlement Plan, based on detailed and final design, has been prepared for the NEPS 220kV Transmission line from Kunduz to Taloqan and submitted to ADB for review and approval. ADB's comments have been communicated back to the consultant to be incorporated for further steps i.e. approval, disclosure and implementation.

For design-bid-build subprojects, a civil works contractor will not be mobilized until the LAR plan is fully implemented. The PMO will monitor the LAR plans and report to ADB. An external monitor will be responsible for issuing a no-objection certificate for the start of civil works. The external monitor will also prepare safeguard compliance reports twice a year.

Indigenous Peoples The tranche 1 project has been classified as Category C. Most future tranche projects are expected to be the same in terms of indigenous peoples impact. The project areas are inhabited by different ethnic groups. The socioeconomic features and level of vulnerability of these people do not fit the traits on which the ADB s definition of indigenous people is based. Indigenous peoples impact of subsequent tranche projects will be categorized through the indigenous peoples impact categorization form. Indigenous peoples development plan and indigenous peoples development frameworks will be prepared in accordance with ADB's Policy on Indigenous Peoples for the projects categorized as Category A.
Stakeholder Communication, Participation, and Consultation
During Project Design Project design, implementation and supervision consultants are undertaking comprehensive analysis and stakeholders consultations (in accordance with ADB's Social Safeguard Policy) to factor in all land acquisition, resettlement and envioronmental considerations into projects design.
During Project Implementation Consultation and information sharing with local communities are being undertaken. Necessary social safeguards and environmental analyses are undertaken and updated after design works are initiated for sub-projects. Relevant documentation is approved by ADB experts before contractor are mobilized to begin construction activities at project sites.
Business Opportunities
Consulting Services

The PMO will require consulting services. Firms and individuals (national and international) will be engaged to provide advisory services in the following areas: (i) project management; (ii) due diligence work (technical, commercial, financial, legal, safeguards, gender, governance, etc.) for subsequent tranches; (iii) detailed design engineering, procurement, and supervision; (iv) safeguard management and gender mainstreaming; (v) evaluation,

monitoring, auditing, reporting, and measuring results; and (vi) training and policy advice. Consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants using the quality-based selection method.

Single-source selection may be used to recruit a consultant to help with the Sheberghan Gas Fields Rehabilitation Project. The least-cost selection method will be used to recruit external auditors and external agencies to monitor the implementation of safeguards. Individual consultants may be recruited for other

assignments, in accordance with ADB procedures for recruitment of individual consultants.


Procurement of works and goods to be financed under the MFF will be implemented in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). International competitive bidding will be used for supply contracts estimated to cost more than $500,000 and for works of more than $2 million. National competitive bidding will be used for goods and works valued at more than $100,000 and below the thresholds for international competitive bidding. Shopping will be used for goods and works equal to or below $100,000.

Limited international bidding may be needed for the Sheberghan Gas Fields Rehabilitation Project. While this is not an ideal procurement approach, attracting competent contractors for this type of project has been difficult in the past. Project implementation has been delayed for several years.

For each ADF-financed project, advance contracting for the procurement of equipment, civil works, consulting services, and other expenditures will be permitted, subject to these being eligible according to agreed upon procedures, and ADB's Procurement Guidelines and Guidelines on the Use of Consultants (2007, as amended from time to time).

Retroactive financing is proposed under individual tranches for expenditures incurred 12 months before the signing of the corresponding financing agreement, with a ceiling of up to 20% of the tranche amount. The Government, MOM, and DABS have been informed that approval of advance contracting and retroactive financing does not commit ADB to financing any of the proposed projects.

Responsible ADB Officer Asad Aleem
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Ministry of Mines_and Petroleum
Mr. Wahidullah Shahrani,
Pashtoonistan Watt across MOF, Kabul
Da Afghanistan Breshna Sherkat
Dr. Jalil Shams
Near Kabul Nandari, Kabul, Afghanistan
Concept Clearance 09 Jun 2008
Fact Finding 23 May 2008 to 06 Jun 2008
MRM 23 Jul 2008
Approval 02 Dec 2008
Last Review Mission -
PDS Creation Date 29 Dec 2008
Last PDS Update 17 Sep 2015

Grant 0134-AFG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
02 Dec 2008 01 Feb 2009 26 May 2009 30 Jun 2014 30 Jun 2016 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 164.00 Cumulative Contract Awards
ADB 164.00 02 Dec 2008 143.04 0.00 87%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 02 Dec 2008 86.40 0.00 53%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

Evaluation Documents

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Related Publications

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