Afghanistan : Addendum to the Afghanistan Power Sector Master Plan

Energy / Energy sector development and institutional reform

The Policy and Advisory Technical Assistance (PATA) supported Afghanistan in preparing its Power Sector Master Plan (the Master Plan) whereby (i) a 20-year demand forecast was produced, (ii) generation and import supply options were analyzed and optimized, (iii) a transmission network was designed to link supply to demand, and (iv) a 10-year investment plan was prepared. A consulting firm, Fichtner GmbH & Co. KG (Germany), was selected as the PATA consultant in October 2011 using quality- and cost-based selection method. In April 2013, the consultant presented the final report to the government and a wide selection of stakeholders in Kabul. The report was approved by the Ministry of Energy and Water, the executing agency. The consultant completed its assignment in May 2013 with an excellent performance evaluation rating. The PATA was closed on 30 June 2013.

The PATA forecasted a five-fold increase in Afghanistan energy demand from 700 MW in 2012 to 3,500 MW in 2032 with new demand to be met from a combination of increased imports and new domestic generation. The PATA recommended that Afghanistan should move from a multi-island network (currently 10 islands) to development of an integrated grid, thereby increasing reliability of supply and allowing planned new domestic power plants (being too large to supply small island networks) to supply a country demand. To resolve synchronization issues,

the interconnections will utilize high-voltage-direct-current (HVDC) back-to-back convertor stations. The recommended investment program was based on an optimization study of various alternatives. The PATA further recommended that such an integrated grid operating asynchronously with neighboring countries would allow Afghanistan to be a transit country for exports from energy-rich Central Asian countries to energy-deficient Pakistan. This concept of linking Central Asia to Pakistan is referred to the acronym TUTAP of the connected countries Turkmenistan, Uzbekistan, Tajikistan, Afghanistan, and Pakistan.

A separate regional concept of linking the Kyrgyz Republic and Tajikistan to Pakistan via Afghanistan, referred to as CASA-1000, has been under development over the last decade by the World Bank. The $1 billion project is primarily designed to supply Pakistan in summer season with hydropower plant summer surplus in Tajikistan and the Kyrgyz Republic but also has the potential to partially supply Afghanistan. The project envisages a HVDC line from Tajikistan to Pakistan with an alternating/direct current (AC/DC) convertor station in Kabul. During preparation of the Master Plan, CASA-1000 was considered to be an inter-regional project focusing on Central Asia and Pakistan, with Afghanistan mainly playing a transit role. With unconfirmed schedule, financing and power supply to Afghanistan only during the summer season (already being provided from Tajikistan over existing lines), CASA-1000 was considered peripheral to the Master Plan.

Since the PATA closing in June 2013, the World Bank has confirmed that CASA-1000 is a high-priority project to be expedited and considered by its Board in Q1 2014. Should CASA-1000 go ahead, it will have an impact on the Master Plan findings by (i) bringing potential additional hydropower plant summer supply, and (ii) allowing Afghanistan to import power to its proposed unified grid power in excess of its needs which could then be exported to Pakistan via the CASA-1000 Kabul AC/DC convertor station. The Master Plan needs to be updated to address these impacts.

The World Bank has recruited consultants to assess the impact of the Master Plan on the CASA-1000 concept with the consultant's report due to issue in October 2013. A draft of the report received in September 2013 presents alternative synchronization and grid configuration options which should be examined and commented on by the consultants of the Master Plan.

A separate matter, there is a requirement for Turkmenistan and Afghanistan to sign a Power Purchase and Sales Agreement (PPSA) as a condition for disbursement under the ongoing ADB-financed project. As the PPSA remains unsigned, Afghanistan needs to urgently consider the impact of deferring Turkmenistan imports.

While training was provided under the PATA, the executing agency still has insufficient capacity to prepare or update the Master Plan. The S-PATA will assist the executing agency in preparing an addendum to the Master Plan to incorporate changes and alternative scenarios.

Due diligence of the second Afghanistan Energy Multitranche Financing Facility (MFF) will be conducted in the first half of 2014. The addendum to the Master Plan is also required to allow (i) the MFF investment plan to be prepared, and (ii) priority projects to be identified. The addendum, to be finalized by early 2014, was requested by the Ministry of Energy and Water.

Increased energy security in Afghanistan

Improved Ministry of Energy and Water ability to analyze and program investment in the power sector

Updated Afghanistan Power Sector Master Plan