After 22 years of conflict and insurgency, aggravated by critical deficits in power infrastructure investment and maintenance, Afghanistan had one of the lowest electrification rates in the world. In 2003, less than 5% of the country’s population had access to grid power, and per capita annual energy consumption stood at 120 kilowatt-hour (kWh). As of 2004, even the limited indigenous generation capacity of 250 megawatts (MW) was not being transmitted to load centers because of lack of infrastructure and a coherent supply chain. This spawned the use of small-scale diesel power generators, costing nearly 10 times the price of grid power per kWh thereby worsening energy poverty and degrading the environment.
The demand−supply imbalance in the power sector distorted the cost of doing business; stifled economic growth and opportunities; affected social indicators; created disparities; and fueled ethnic and regional tensions, insecurity, and discontent. Investment in Afghanistan’s crumbling energy infrastructure was therefore stressed as the most critical need by the country’s leadership. After security, access to energy was the highest priority in Afghanistan.
Against this backdrop, the Asian Development Bank (ADB) approved in April 2005 a loan and grant totaling $50 million for the Power Transmission and Distribution Project. At appraisal, the project intended to finance the construction and/or rehabilitation of 216 kilometers (km) of transmission lines and 10 substations with provision for 90,700 electricity connections in the northern, eastern, and southern regions, where nearly 75% of Afghanistan’s population lived. However, because of higher bid prices and unforeseen implementation challenges ─ including weak capacity of the executing and implementing agencies; difficulty in gaining access to project sites; security risks and the need for demining; and lack of counterpart financing due to fragile public finances ─ the southern region was dropped from coverage.
At completion, the project delivered 114.2 km 110 kilovolt transmission network, with 6 associated substations and 13,200 distribution connections. Assets in the northern region supplied cheap energy mainly from power imports from Tajikistan and indigenous mini hydropower plants. Eastern region assets, connected to an existing hydropower plant in Naghlu, Kabul province, supplied power at a tariff that was only 15% of what the people paid for diesel−generated electricity in 2002−2012. The project’s physical outputs were completed and fully commissioned in 2013, nearly 5 years after the original June 2008 completion date.
Overall, the project supplied cheap and sustainable grid power at $0.05 per kWh and reduced transmission and distribution losses to around 25%. It lowered the cost of doing business, helped accelerate industrial and commercial development and other job creation and social development activities, and cut poverty, with nil environmental cost. Despite a reduced scope and delayed completion, the project thus was able to significantly contribute to addressing the absence of grid power supply in primary and secondary load centers that comprised a binding constraint to Afghanistan’s development.
The project was rated successful by ADB’s Central and West Asia Department. It was initially implemented by the Da Afghanistan Breshna Moassessa (DABM), Afghanistan’s power authority, with the Ministry of Energy and Water (MEW) as the executing agency. When the DABM was dissolved in 2009, the MEW took over project implementation.
