The technical assistance (TA) is intended to support the Government of Afghanistan in identifying power sector deficiencies and systematically prioritizing the sector's rehabilitation needs. Transmission will be optimized and integrated, and generation expanded, to promote interregional electricity trade, improve energy security and efficiency, and reduce greenhouse gas emissions. The TA will also increase the capacity of the Ministry of Energy and Water (MEW) to a level at which MEW can analyze the country's power sector needs without the help of a third party. During an Asian Development Bank (ADB) reconnaissance mission in March 2010, the government, through the MEW, requested financing for this TA.
The impact will be increased energy security in Afghanistan. The specific performance targets, to be developed by the TA project team and the government, will include increases in indigenous generation, and electricity trade within the region.
The outcome will be MEW's improved ability to analyze and program investments in the power sector. The identified investment projects, justified on economic, financial, safeguard, and technical grounds, will offer long-term solutions to the problem of balancing electricity demand and supply in the country. The TA will also find nonphysical opportunities for reform within the power sector (possibly with private sector participation), capacity development, and international aid agency coordination.
The TA outputs will be twofold: (i) a master plan identifying load centers and forecasting the long-term growth in demand, a generation strategy considering both indigenous and foreign power supply sources, and a transmission network development plan for interconnecting generation facilities and load centers; and (ii) trained MEW staff who can continually update the master plan and keep it relevant.
|Project Rationale and Linkage to Country/Regional Strategy
Years of war and neglect have left Afghanistan's electricity sector in poor condition. Electrification ratios and energy consumption rates are among the world's lowest. By some estimates, less than 10% of the population have intermittent access to publicly provided power, and per capita electricity consumption is as low as 21 kilowatt-hours a year. Many load centers around the country get electricity only 2-3 hours a day. Such electricity shortage affects people in urban and rural areas alike, and constrains economic growth.
The government has been developing the Afghanistan National Development Strategy (ANDS) since 2004, with the support of the international community. The energy sector has top priority in the ANDS, which calls for investments in infrastructure in general, but particularly for energy security. Achieving energy security will require expanding and improving transmission and distribution networks, and increasing domestic generation capacity by using a mix of hydro and thermal resources.
The need for a master plan for the power sector was identified at the time the ANDS was first developed. The master plan was prepared in 2004 with the support of the World Bank. However, the master plan quickly became outdated, as MEW lacked the capacity to update it. MEW's power sector strategy, for instance, was based on the requirement assumed in the 2004 master plan. This requirement did not take into account the population increase between 2004 and 2007 and, therefore, significantly underestimated Kabul's needs in 2007.
Although power projects are an ANDS priority, the ANDS power sector investment program has not been implemented properly. Without an updated master plan, many activities under the ANDS have become ad hoc and lacking in strategic management. Many aid agencies have supported power investments without coordinating and consulting with one another. The North East Power System, a successful initiative of the ANDS, brought immediate power to major load centers in the northeast, but there were incompatibility issues because seven different aid agencies were involved,4 In many instances, the same type of equipment had different specifications, complicating future maintenance. Coordination would have brought some sort of standardization within the system.
MEW requested ADB to develop the power sector master plan, and requisite capacity within the Ministry to administer and update this master plan. This was thoroughly discussed with the other development partners during both the bilateral meetings as well as in the Inter Ministerial Commission for Energy, a forum of Afghan energy stakeholders comprising the government and key development partners in the sector. Other partners in the energy sector include United States Agency for International Development, Kreditanstalt f r Wiederaufbau, and the World Bank. ADB, with its $570 million multitranche financing facility approved in 20085 and other ongoing projects to MEW, is the largest international agency supporting the energy sector. The government and international community agreed that ADB, as lead agency within the energy sector, would undertake the development of the power sector master plan.
Strategic prioritization of projects is needed, as priorities are difficult to determine and often vary among different officials. The government needs to prepare an updated master plan to prioritize power sector projects, and set reasonable goals and time frames. MEW should also be able to implement the master plan, and continuously update it.
Afghanistan will have to deal with the complexities of regional trade in its master plan. Within the region, Afghanistan imports power through the North East Power System to supply major load centers in the country's northeast. Once the new Tajikistan-Afghanistan transmission line is complete by mid-2011, Afghanistan can start to receive power from Tajikistan. New options for power imports from Turkmenistan, and the possibility of exporting to neighboring countries, such as Tajikistan and Pakistan, are being considered as well.
The Central Asian republics are also considering the advantages of intraregional and interregional trade in electricity. The Central Asian Regional Economic Cooperation action plan reflects the wish of the four Central Asian republics and Afghanistan to study the benefits of a regional approach to managing the central asian power system.
A regional master planning TA project is now being implemented by ADB in Central Asia and Afghanistan will identify deficiencies in the national power sectors, and optimize and integrate transmission and expand generation to resolve the deficiencies and promote electricity trade within the region and with other regions. The output of the Afghanistan master plan TA will be an input to the regional master plan study. The consultants for the regional study will also coordinate with, and provide input to, the proposed TA.
Lessons from previous assistance to the government in master planning point to the importance of building the capacity of MEW's planning cell to keep the new master plan relevant without external help. Updating is particularly needed in an environment like Afghanistan's where there is rapid growth in major load centers like the capital, Kabul. A capacity development component was thus included in the TA. To mitigate the risk that the commitment to update the plan may not be sustained given the relatively limited skills in areas related to this TA, a significant number of counterpart staff from MEW's planning cell will support the consultants in data collection and analysis throughout the TA, and thereby gain experience in drafting the master plan.