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8/10/2019 AFGHANISTAN-Sustainability of Energy Supplies
ccording to the United Nations (UN), access to reliable and cost effective energy lies at the core of
sustainable economic development, with access to electricity identified as necessary for meeting all the
UN Millennium Development Goals (MDG). There is also a strong relationship between per capita
electricity consumption and human development, according to Nuclear Energy Institute. Therefore, with
Afghanistan in the bottom 10% globally in electricity consumption per capita, the rehabilitation of energy
infrastructure, including increased power generation, power transmission capacity and upgraded electric
distribution grids, has been identified as a priority by the Afghan government and international donors,
according to a 2012 report by the Special Inspector General for Afghanistan Reconstruction (SIGAR). The
Energy Sector Strategy for Afghanistan, part of (ANDS),
recognises that access to energy is a necessary condition for revitalising the Afghan economy weakened bydecades of war, noting ic development priority, and [its]
growth is, in turn, at the heart of increased employment, poverty reduction, and overall social and political
stability and security.
This report focuses primarily on the electricity sector mainly because the ANDS and international donors have
given a far greater priority to electricity than to other energy subsectors, noting in the ANDS modern
economies are built on electricity ctricity sector is also stressed by the World
which identifies poor access to electricity as the number one constraint to
investment and business development in South Asia, including Afghanistan. This report first examines the
current state of the electricity sector in Afghanistan, focusing on access, reliability, and affordability of electric power supplies. Secondly, it sheds light on obstacles that may undermine sustainability of electricity supplies
in Afghanistan. Finally, it reviews the economic and security implications of sustainable energy supplies or the
lack thereof in Afghanistan and concludes with a brief review of opportunities and potentials that may enhance
The Afghanistan Energy Sector Strategy admits that reliable energy data for Afghanistan is scarce. Based on
the estimates of the Afghan Ministry of Energy and Water (MEW), as of 2012, one in three Afghans, or about
33%, have access to electricity. This is a large improvement considering that, historically, Afghanistan coverage has never exceeded more than 22% of its population, according to South Asia Regional Initiative for
Energy (SARI). Nonetheless, the figure masks stark differences between coverage in rural and urban areas.
Out of an estimated population of 35 million, around 74% of Afghans live in rural areas where only around 9%
have access to electricity, says the US Department of Defense. While noting that there is little data for
Afghanistan on rural energy use, the United States Agency for International Development (USAID) estimates
that 28 million people, mostly rural poor, have no access to reliable, modern forms of energy and instead rely
on self-supplied energy sources, using wood, dung and other biomass for fuel.1
In contrast, the remaining 26% who live in urban areas have electrification coverage estimated to be around
77%, according to the US Department of Defense.2 However, a 2010 report by the Asian Development Bank
says less than 10% a public grid. A 2012
report by the German government adds that only 20% of the population is connected to the public power grid,
with and installed power generation capacity concentrated in Kabul. The
greater Kabul region also accounts for approximately consumption,
details the Austrian Renewable Energy and Energy Efficiency Partnership (REEP).
A SIGAR report on the Afghanistan energy sector indicates that the current state
electricity has not met the goals and benchmarks established in 2008 by the ANDS and Afghanistan Compact.3
For instance, ANDS aimed to achieve
based on market- in addition to extending
electricity access from the public power grids to 65% of households in urban areas and 25% in rural areas by
the end of 2010. USAID officials recognised overly ambitious, lacking
implementation mechanisms while being based on inaccurate information.
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Energy supply, namely power generation and accessibility, has increased significantly by means of
international assistance, says a SIGAR audit. The Table 1 illustrates that while total electricity supplies have
almost doubled in the last three years, this increase has been favoured by imports, which tripled in the same
period as domestic production slightly decreased. The SIGAR audit further indicates that while Afghani
installed energy capacity has increased by around 139% (from approximately 430 megawatts (MW) in 2001 to
1029 MW in 2009),4 60% (or 621 MW)
installed capacity.5 Furthermore, data from the Afghan Energy Information Center (AEIC) indicate that, for
1 Opportunities for Micro-Electric Power in Rural Afghanistan, electricity coverage at the provincial level is the National Risk Vulnerability Assessment ( NRVA) from 2005.2 This includes privately owned diesel-power generators.3 The Afghanistan Compact is a result of the London Conference on Afghanistan in 2006. It sets out the common goals and theframework for international cooperation between Afghanistan and the international community.4 Installed capacity is the maximum amount of electricity measured in megawatts that can be produced. Operational capacity isthe actual amount of electricity generated. A difference between installed and operational capacity may be caused by insufficient
maintenance, lack of modernization, dilapidated generation and transmission infrastructure, and other factors.5 This includes electricity generated from thermal, hydro, and diesel power as well electricity import.
S our ce : Co m pi l e d by t h e Au t hor , Af ghan En e rgy In f or m a t ion C e n t e r , 2012 .
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Despite the progress, a USAID report on the Afghanistan energy sector indicates that
several sustainability challenges in maintaining and growing its energy supply Along similar lines, Clare
Lockhart, a former UN adviser in Afghanistan, pointed out that energy remains a huge constraint for the
[t]here has been enormous amount of investment, and there has been some
progress, but the outcome is far less than the input, quotes NPR . As the next section of this report illustrates,
the lack of infrastructure, dependence on expensive, diesel-generated power, institutional capacity constraints,
and insecurity pose serious obstacles to energy supply sustainability in Afghanistan.
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In the abovementioned article, Lockhart states that the current supply hardly meets demand. Despite the
availability of power, the USAID Energy Strategy for Afghanistan indicates that the existing transmission
network is inadequate to handle the available supply from neighbours like Uzbekistan and Tajikistan, further
noting that supporting infrastructure would allow Afghanistan to import up to 900 MW of power from the
neighbouring countries. Afghanistan has, for instance, contracted 370 MW to be imported from Uzbekistan
and Tajikistan through NEPS. Out of this amount, Afghanistan is able to currently import only 70 MW via
NEPS due to insufficient infrastructure. Echoing this point,
minister for electricity notes that cannot bring more than 300 megawatts to Kabul even
though the need is high, quotes NPR . In addition, the abovementioned USAID document indicates that
numerous power generation units are operating below installed capacity due to issues in fuel, water shortages,
maintenance problems and rehabilitation. The lack of infrastructure may pose a challenge considering that
6 Despite the fact that data in total, domestic production reported by the MEW corresponds with data reported by USAID-fundedAEIC, the composition of the domestic production varies. For instance, for 2011 AEIC reports that out of the total of 842 millionkWh, 802 million kWh was generated from hydropower and 40 million kWh from thermal power. In contrast, the MEW reports
that of 846 million kWh, 595 were generated from hydropower in 2011-2012, 123 from thermal power and 128 from diesel power. This disparity does not, however, challenge the overall decline in domestic production.
rose more than 30% in only two years. Moreover, the D e f e n ce Indu st ry Daily y some estimates,
shipping each gallon Also as Anna Paterson
points out in her paper entitl Understanding Markets in Afghanistan: A Study of the Market for Petroleum
Fuels, logistical difficulty of importing and distributing fuel, especially in winter, adds to the retail cost
Therefore, the Afghanistan Public Policy ResearchOrganization claims that due to high costs, powering generators through subsidised import of petrol and diesel
is not a sustainable option in the long-term. Furthermore, the implications of fuel dependence were
demonstrated in December 2010, when the Iranian government restricted oil and gas shipments to Afghanistan
for political reasons, with the ensuing shortage driving diesel fuel costs up almost 30% in the first week of
2011 alone (see the Civil-Military Fusion Centre (CFC) report entitled The Iranian-Imposed Slowdown on
Fuel Imports into Afghanistan).
The situation in Kandahar city, one of the Afghanistan urban economic hubs, epitomises
about the sustainability of diesel-run power plants, according to the Wall S t r ee t Journal . With access to
reliable electricity since late 2010, Kandahar has experienced an economic boom, with more than 100 new
factories opened in Kandah Shurandam. The 10 MW power plant in Shurandam, is powered by military-run diesel generators with fuel procured and donated by USAID. Shurandam accounts for
more than half of electric supply, providing the only reliable 24-
industries. However in 2013, the military is scheduled to transfer diesel plants to DABS; the current funding
for diesel fuel and maintenance is projected to run out by January 2014, with no current plans to fund the
Wall S t r ee t Journal . However, the Afghan government indicated that it
cannot afford the expenses, with Afghan Finance Minister Omar Zakhilwal stating that fuelled
generators] are not easy for [Afghanistan] As an
example, for fiscal year 2013 alone, fuel and maintenance costs for the Kandahar plants are projected to cost
USD 100 million compared to USD 48 million in 2011, according to the US Army Corps of Engineers. DABS
reportedly cannot afford fuel procurement, since the amount constitutes more than half of its current
nationwide revenue or more than 400% of Kandaha total revenue, as mentioned in a SIGARaudit. The diesel power plant was supposed to be a temporary solution, the so- Bridging
Solution, NEPS that transmits imported power and to the Kajaki
hydropower plant in Helmand province which would provide domestically generated and more affordable
electricity. However, the SIGA from July 2012 concludes that the completion of both projects
has been delayed and that
Solution until well beyond 2014
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The donor-led expansion of did not come along with a strengthening of DABS
capacity to collect revenues to fund fuel costs and operations and maintenance expenses, claims a joint SIGAR
and Ernst & Young report. DABS also lacks the ability to recruit and retain qualified staff. This, in turnimpedes its capacity to operate and expand the power system on its own a necessary
funding diminishes or runs out. For instance, b
assume responsibility for all operational and maintenance costs related to power systems as well as for fuel
procurement in 2013. However, based on the 2012 questionable capacity and lack
the resources financial and otherwise necessary to fulfil
2012, DABS in Kandahar City still only bills two-thirds of its electricity output and only collects revenues
from approximately 30% of its billed consumption. In addition, another SIGAR report estimates commercial
losses between 60% to 80% to DABS due to inadequate metering and customer information systems. With
regard to Kandahar, USAID has concluded that if losses, which are estimated to be at least 50%, are not
reduced, donor investments are unlikely to be sustainable. The situation is not likely to change in the near
future; as of July 2012, Afghanistan lacked an updated Energy Sector Master Plan necessary
The World Bank in its Summaries of Vulnerabilities to Corruption Assessments for the energy sector
highlights that corruption also poses a challenge and impairs DABS ability to collect revenue. The study notes
that extra fees for connections, bribes to meter readers and patronage for jobs in the MEW are common. For
instance, 25 signatures are required to secure an electricity connection in Kabul through the official
procedures, while no signatures are necessary for connections secured through personal connections or bribes.
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Research indicates that security concerns, particularly in the south and east of Afghanistan, endanger the
development and sustainability of the energy sector. For instance, insecurity related to the rehabilitation of the
Kajaki hydropower plant in northern Helmand prevented construction work and significantly inflated the costof the entire project due to the vulnerability of the main access road to Taliban attacks, according to Th e
Guardian . from building new
transmission lines because of the need to de-mine the area, with insurgents regularly destroying power lines.
Also, according to the Energy Infrastructure Attack Database (EIAD) administered by the Center for Security
Studies at ETH Zurich and the Paul Scherrer Institute (PSI), Afghanistan was among the countries with the
highest concentration of energy infrastructure attacks. Quoting an assessment report issued by the US Senate
Committee on Foreign Relations, the Center For Strategic & International Studies (CSIS) notes that in some
areas the insurgents control the electric grid that receives electricity from the Kajaki hydropower, with the
. Based on the Helmand government estimates,
valued around USD 4 million to theTaliban annually, reports the Wall S t r ee t Journal .
will be the availability of electric power the necessity of electricity for economic
development was expressed by the owner of a factory in the Shurandam park
no industry here, and n
Wall S t r ee t Journal . Another Afghan businessman reportedly expects most of the new factories to close after
the funding for the diesel plants provided by donors runs out. Before having access to electricity from the
military-run diesel plant, factories operated on their private diesel generators. In this regard, an owner of afactory told the Wall S t r ee t Journal that the majority of the earned income was expended on diesel fuel, further
adding that due to high costs, the . The
sustainability challenge is not limited to Kandahar. According to Ghulam Farooq Qazizada,
deputy minister for electricity, most of industrial parks in seven major cities lack the access to
sufficient supplies of electricity, with some industries receiving only about 15% of the power they need,
reports NPR . Lockhart tells NPR that even if the international community can develop a clear strategy, many
business owners are still going to need their generators. She says:
decades time only 60% of the country wil and s the best estimate.
With security and development being often inextricably linked, research indicates that the sustainability of
energy supplies in Afghanistan or the lack thereof may have security implications. For instance, in Kandahar, a focus of the counterinsurgency strategy (COIN), power plants have
as a key weapon against the insurgents Wall S t r ee t Journal . The increase in business
activity reportedly weakened the insurgency in the cradle of the Taliban movement, leading to a dramatic
decline in insurgent attacks within the city. Mohammed Omer, Kandahar stated
Shurandam industrial park, powered by the diesel plant that Afghanistan cannot afford to fuel and maintain
after donors , was supposed to have
providing better services to its people Ambassador Karl Eikenberry. Since COIN depends
on winning the support of the local residents, there have been concerns that any delays or inability to deliver
power may create an expectations gap. Specifically, the SIGAR report cautions that the lack of funding and
delays to the energy-related infrastructure projects adverse COIN effects by putting in questionthe Afghan g sustain energy supply for the people of
Afghanistan.
The installation of sixty solar-powered streetlights in Badakhshan further exemplifies security benefits derived
from the increased access to electricity, according to USAID. Not only will these solar lights reduce costly
diesel fuel consumption and, in turn, improve air quality; but the streetlights are also believed to have a
stabilising effect by reducing crime, improving security for the population, bolstering night-time traffic and
facilitating more income for Afghans operating local shops along the lit roads.
Despite the improvements in rehabilitation and expansion of the power sector, the research reviewed in thisreport shows that electricity remains a scarce resource in Afghanistan. Around 70% of the Afghan people still
do not have access to power, with imports constituting more than 70% of the power that does reach Afghans,
summarises the Wall S t r ee t Journal . Moreover, the electricity sector faces significant sustainability issues that
may have significant economic and security implications.
Despite the challenges, there are also opportunities for enhancing the energy security of Afghanistan.
Specifically, the vast potential of the greatest
hope the ANDS. Similarly, research reviewed in
the Opportunities for Micro-Electric Power in Rural Afghanistan
geographical characteristics offer a great potential to take advantage of renewable energy technologies,
particularly in hardly accessible and often neglected rural areas. Concerning the renewables, Afghanistan has a potential to produce 23,000 MW of hydropower, with only 260 MW having been developed so far, estimates
the Austrian Renewable Energy and Energy Efficiency Partnership (REEP).
Afghanistan also has substantial hydrocarbon resources that may bolster energy security and, in