Afghanistan’s power generation, transmission, and distribution systems had been severely damaged by years of conflict, and by 2006, there was almost no transmission grid and generation was limited. The lack of generation capacity led to widespread load shedding throughout the country, with supply available for only a few hours a day. The use of small-scale diesel generation increased air pollution and the average generation cost was high. At the same time, there were large surpluses of hydropower generation in Tajikistan. During summer, water was spilled without generating electricity because of the absence of transmission capacity and access to electricity export markets. Inadequate domestic market in Tajikistan and the inability to meet electricity demand in Afghanistan meant that regional cooperation was a mutually beneficial approach to resolving the supply and demand issues in the two countries.
Against this backdrop, the Asian Development Bank (ADB) approved in December 2006 the Regional Power Transmission Interconnection Project for: (i) a loan of 23.563 million in special drawing rights (SDR) and a grant of $12 million for Afghanistan; and (ii) a loan of SDR14,475,000 for Tajikistan. The project was designed to achieve five outcomes: (i) fast restoration of power supply and reduction of electricity cost in Afghanistan, (ii) increased power export capacity and access to new power markets for Tajikistan, (iii) increased generation capacity in Tajikistan’s southern grid, (iv) improved capacity of the Afghanistan Power Authority (DABM) in utility operations, and (v) improved commercial operation of Barki Tojik, the company responsible for electricity generation, transmission, and distribution in Tajikistan.
A 220 kilovolt (kV) transmission line was constructed as planned from the Pul-e-Khumri substation in Afghanistan to country’s border with Tajikistan, and was commissioned in October 2011. Work on the substations was however delayed, particularly the construction of two switchyards by an Iranian contractor, financed by the Islamic Development Bank, whose progress was affected by sanctions imposed on Iran and its banks by the international community. A month before project closing in June 2014, construction of the switchyards was 95% complete and expected to be finished by September 2014.
Targeted outputs in 3 of the 4 project components in Tajikistan were delivered as planned, including the construction of a transmission line from Sangtuda to the Pyanj River crossing, improvement of the Sangtuda substation, and upgrading of metering equipment and data collection system. Outputs on the generation component were limited to the dredging of the canals in 2 hydropower plants (HPPs) and the upgrading of a unit of the Golovnaya HPP. Replacement of a transformer at the Golovnaya HPP, to be financed by Barki Tojik, was not implemented because of lack of funds. Optimization of the Vakhsh River cascade, which was not feasible as there was no data acquisition system in place, was also not carried out.
At completion, the project thus effectively achieved its intended outcomes of restoring Afghanistan’s power supply and improving Tajikistan’s market access and export capacity. Per capita electricity consumption in Afghanistan rose from 21 kilowatt-hours (kWh) per year at appraisal to 106 kWh per year by 2011, well above the target of 35 kWh per year. Retail electricity sales in Kabul and Kunduz grew by 70% in 2009. In addition, 1,100 grid-connected diesel generators (26 MW equivalent) discontinued operations in 2011, and a further 174 diesel generators (15.3 MW equivalent) were decommissioned in 2012. As a result, the cost of electricity in Afghanistan substantially declined. However, the targeted 100% replacement by June 2009 of the Kabul diesel turbine power station during the six summer months was not achieved because of the limited distribution network and connectivity in Kabul to supply the imported electricity from Tajikistan.
In Tajikistan, the project did not reach the anticipated export capacity of 300 MW but achieved only 200.6 MW in August 2013. However, the project installed a transmission capacity of 600 MW and further increases in export volume will be attained upon completion of the 220 kV substations in Baghlan and Kunduz, and the distribution networks in northern and eastern provinces funded by ADB and the World Bank. The export of electricity led to valuable foreign exchange earnings for Tajikistan—of $16.8 million in 2012 and $28.8 million in 2013. Afghanistan’s power costs decreased by $11.8 million in 2012 and $20.0 million in 2013 because of the lower electricity cost from Tajikistan than from Uzbekistan.
Overall thus the project demonstrated that regional cooperation in power trade is possible and workable and could lead to mutually beneficial outcomes. In Afghanistan, it had the Ministry of Energy and Water as executing agency and the DABM as implementing agency. In Tajikistan, Barki Tojik served as executing agency, while a project management unit established under the Office of the President in 2006 supervised day-to-day project implementation.
