Afghanistan: Energy Supply Improvement Investment Program (Formerly Multitranche Financing Facility II: Energy Development 2014-2023)

Sovereign Project | 47282-001

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.

Project Name Energy Supply Improvement Investment Program (Formerly Multitranche Financing Facility II: Energy Development 2014-2023)
Project Number 47282-001
Country / Economy Afghanistan
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
MFF Facility Concept 0090-AFG: Energy Supply Improvement Investment Program (FormerlyMultitranche Financing Facility II: Energy Development 2014-2023)
Asian Development Fund US$ 750.00 million
Afghanistan Infrastructure Trust Fund US$ 450.00 million
MFF Facility Concept: Energy Supply Improvement Investment Program (Formerly Multitranche Financing Facility II: Energy Development 2014-2023)
People's Republic of China Poverty Reduction and Regional Cooperation Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Regional integration
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.

improved access to sustainable energy supplies across Afghanistan, aligned with the targets of the National Energy Supply Program of the Government of Afghanistan.

Project Outcome
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 governments request and the grant whole grant was also canceled by ADB in July 2019.
Implementation Progress
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.

Business Opportunities
Consulting Services

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
ADB 750.00 - 0.00 0.00 %
Counterpart 20.00 Cumulative Disbursements
Cofinancing 450.00 - 0.00 0.00 %

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