Afghanistan: Energy Supply Improvement Investment Program (Formerly Multitranche Financing Facility II: Energy Development 2014-2023)
The Asian Development Bank is working with Afghanistan to strengthen its energy security through improved infrastructure and development of new power sources. The program is supporting investments in new transmission lines and distribution networks, renewable energy projects, and domestic gas well upgrades to expand power output, diversify production, and increase cross border energy exchanges.
Central and West Asia Department
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|Project Name||Energy Supply Improvement Investment Program (Formerly Multitranche Financing Facility II: Energy Development 2014-2023)|
|Country / Economy||Afghanistan
|Project Type / Modality of Assistance||Grant
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Partnerships
|Sector / Subsector||
Energy / Electricity transmission and distribution
|Gender Equity and Mainstreaming||No gender elements|
The MFF will reinforce ongoing projects and finance new investments to boost energy trade and regional cooperation, strengthen the country's energy infrastructure, increase energy supply to accelerate electrification rate, and improve operational efficiency in the sector. In power, generation (renewable energy), transmission (regional and domestic lines), and distribution (on- and off-grid networks) projects are proposed; while wells rehabilitation is planned in gas.
The impact of the MFF will be improved access to sustainable energy supplies across Afghanistan. The outcome will be increased supply of imported and indigenous power.
|Project Rationale and Linkage to Country/Regional Strategy||After security, access to energy is the highest priority of households and businesses in Afghanistan. Energy demand has grown by almost twice the economic growth rate during 2005-2012. Afghanistan is among the lowest 5% in per capita energy consumption globally and is a net energy importer. In 2014, more than 80% (1,000 megawatts [MW]) of its total power supply (1,247 MW) came from Iran (16.2%), Tajikistan (25%), Turkmenistan (12%), and Uzbekistan (27%), with the rest generated through indigenous hydropower and thermal sources. Lack of domestic generation remains the key challenge for energy security in Afghanistan. Lack of energy supplies and the demand-supply imbalance constrain growth and income opportunities; create disparities in economic development; and fuel ethnic and regional tensions, insecurity, and discontent. Despite significant potential for renewable energy and fossil fuel reserves, these have not been developed because of financing constraints.|
|Impact||improved access to sustainable energy supplies across Afghanistan, aligned with the targets of the National Energy Supply Program of the Government of Afghanistan.|
|Description of Outcome||increased supply of imported and indigenous power.|
|Progress Toward Outcome||The bidding process for 20MW Naghlu Solar Power Plant (Tranche 3) was canceled as per the government's request and the grant whole grant was also canceled by ADB in July 2019.|
|Description of Project Outputs||
New 500 kV and 220 kV power transmission lines, power distribution networks, and high-voltage, direct-current, back-to-back convertor commissioned
renewable energy projects constructed
domestic gas production and imported volume of natural gas from TAPI gas pipeline increased
project preparation and management capacity of energy ministries and agencies improved
DABS business plan, and tariff model and framework developed.
|Status of Implementation Progress (Outputs, Activities, and Issues)||
Achievable by the completion of all projects by 30 June 2025.
Achievable by completion of all project by 30 June 2025.
Achievable after completion of project by 30 June 2025.
Achievable by completion of all project by 30 June 2025.
All packages of 500kv transmission lines connecting Turkmenistan power to the Afghan grid have been awarded and the physical in under process with expected completion by Q2 2021.
The bidding process for 20MW Naghlu Solar Power Plant (Tranche 3) was canceled as per the government's request and the grant whole grant was also canceled by ADB in July 2019.
|Geographical Location||Nation-wide, Afghanistan|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||The project is classified category B for environment. DABS prepares an initial environmental examination (IIE) reports, including an environmental management plan (EMP) in accordance with ADB's Safeguard Policy Statement (2009). The environmental impacts anticipated during the construction are envisaged to be site-specific and temporary and can be mitigated through implementation of the EMP. Potential environmental impacts of the project during operations include fragmentation of the bird habitats and the electrocution or injury of birds through collision and contact with wires. The EMP mitigation measures will be developed after thorough consultations and careful routing of the transmission line to be undertaken during detailed design, specially designed poles, conductors, and insulators; and the provision of bird diverters. The draft initial environmental examination report was disclosed on ADB's website in Q4 2015. The current security situation along the line route has made it difficult to consult effectively with communities. The public consultations will be conducted and the IIE and EMP updated prior to construction. Implementation of the EMP is being reported through environmental monitoring reports, which are submitted to ADB semiannually. EA has assigned a team of Eniromenal Safeguard experts while the the environmental specialists of the implementation consultant provide additional support to the PMO.|
|Involuntary Resettlement||The project is category B for involuntary resettlement. Based on the preliminary project design, a land acquisition and resettlement plan (LARP) has been prepared in close consultation with affected households and disclosed on ADB website during Q4 2015, in accordance with ADB's Safeguard Policy Statement. A detailed socioeconomic survey for Tranche 1, 2, 3, 4 and 5 has been carried out. Once the contractors complete the detailed design, DABS updates the LARP and submit it to ADB for approval and no civil works start until the LARP is fully implemented by DABS. Sectional approach is applied for the private and government owned lands for all projects including 500-kV and 220-Kv transmission lines, substations and distribution network packages under MFF. EA has submitted due diligence report (DDR) for government owned land and LARPs for private land. The substation sites are mostly owned by the government. The implementation of the LARP are monitored semiannually and a compliance reports are submitted to ADB for review and approval. The reports include the number of affected households that have been paid compensation, the amount paid, and the locations where compensation was completed and structures demolished, if any.|
|Indigenous Peoples||The project is category C for indigenous peoples. The field social survey found that no ethnic minority, as defined by ADB's Safeguard Policy Statement (2009), will be involved in or affected by the project.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||The project design, implementation and supervision consultants undertook a comprehensive analysis and stakeholders consultations (in accordance with ADB's Social Safeguard Policy) to factor in all land acquisition, resettlement and environmental considerations into projects design. The engagements was also taken through Inter-ministerial Commission for Energy (ICE) in 2015.|
|During Project Implementation||Consultation and information sharing with local communities is being made. Necessary social safeguards and environmental analyses will be undertaken and updated once the design work is initiated for sub-projects. Relevant documentation will be approved by ADB experts before contractor could be mobilized to begin construction activities at project sites.|
Project implementation consultants (firms) will be recruited to assist the PMO of the DABS and the MEW. The consultants' tasks will include: (i) supervision of project implementation; (ii) training for DABS and MEW. This will be under DABS' responsibility and recruited by DABS.
Consultants will be selected and engaged in accordance with the Consultant Guidelines, as amended from time to time. Quality-and Cost-based selection method (QCBS) with 90:10 weightage will generally be used to attract more interest of qualified firms, considering volatile security situation in the country. Controlling progress, quality, cost and safety of construction works in Afghanistan is widely recognized to be an extremely difficult task. As the performance of the consultant has a significant impact on the quality of the output and further entails downstream impacts to the community, environment and project sustainability, the quality of the consulting services is prioritized over cost.
The turnkey contracts for Energy Supply Improvement Investment Program include: (i) 500 kV transmission line from Sheberghan to Dashte Alwan in northern Afghanistan, and (ii) 220 kV transmission line from Andkhoy to Sheberghan to Dashte Alwan.
Procurement of works and goods to be financed under the Investment Program will be implemented in accordance with ADB's procurement guidelines (Procurement Guidelines) as amended from time to time. International competitive bidding (ICB) will generally be used for supply contracts estimated to cost over $0.5 million and for works over $2 million.
|Responsible ADB Officer||ADB Disclosure|
|Responsible ADB Department||Central and West Asia Department|
|Responsible ADB Division||Energy Division, CWRD|
|Concept Clearance||19 Nov 2013|
|Fact Finding||14 Sep 2015 to 30 Sep 2015|
|MRM||27 Oct 2015|
|Approval||04 Dec 2015|
|Last Review Mission||-|
|Last PDS Update||30 Sep 2020|
MFF Facility Concept 0090-AFG
|Financing Plan||Grant Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||1,220.00||Cumulative Contract Awards|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
ADB $1.2 Billion Grant to Support Afghanistan’s Energy SecurityADB has approved $1.2 billion in grants to reinforce ongoing energy projects in Afghanistan and to provide new funds to boost energy supply, improve power sector efficiency, and promote cross border trade in energy.