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Sustainability of Energy Supplies in Afghanistan

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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

Afghanistan energy sector.

L

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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.

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instance, in 2006, 19 out of 45 power plants listed by the AEIC were not operational, while by 2011, only 8 out

of 45 did not produce power.

84&6$(+G(Q6$D5'1D15;(R' @=D51 /(4/@(2%- '50(>:1661 /(AF.?(

F iscal Year 2011-12 2010-11 2009-10

To t al El ec t ri c i t  y S upply 3578,5 2802,8 1893,7

I m por ts   2731,9 1866,7 956,6

Do m e st i c  Produ c t ion 846,6 936,1 937,1

S our ce : A f  ghani st an S t a t i st i c al Y e arboo k   2011-2012 , Mini st ry o f   En e rgy & Wa t e r and Min e s , 2012 . 

According to the Energy Sector Strategy, access to energy in the major economic hubs  has also been

improving significantly. Parts of Kabul, Herat, Mazar-e Sharif and Pul-e Khumri have a 24-hour power supply 

for the first time in decades, reports the World Bank. This is the result of being connected to the North-East

Power System (NEPS), which transmits power from Uzbekistan (Figure 1). Particularly in Kabul, the situation

is far better than in the rest of Afghanistan, with around 70% of households connected, reports R e u t e r s . The

chief executive officer at Afghanistan biggest utility company, Da Afghanistan Breshna Sherkat (DABS),

Abdul Razique

In 2001, only 6% of Kabul city had access to electricity, according to Wad s a m .

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 Af  ghan En e rgy In f  or m a t ion C e n t e r (AEIC) , 2011 . 

In terms of institutional capacity, there has been an expansion of services delivery from a low base in 2001,

according to the report Prioritization and Implementation Plan Mid 2010    Mid 2013 by the government of

Afghanistan. In addition, the AEIC states that metered connections have increased nearly three and a half times

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 between 2003 and 2010, from 227,000 to 786,000, respectively. Lastly, a 2012 audit by SIGAR revealed that

revenue collection of DABS-Kabul has improved by 59%, and technical and commercial losses have decreased

 by 12%.

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Since the rehabilitation and expansion of the electricity distribution system for the key economic hubs has been

a priority, Afgha  of four main isolated power grids clustered around areas of

Kabul in the east, Mazar-e Sharif in the north, Herat in the west, and Kandahar in the south, details the Energy

Sector Strategy (see Figure 2). The largest energy project is the construction of the aforementioned NEPS with

a goal to provide lower-cost power to the northeast part of Afghanistan. The project involves the construction

of power lines and distribution systems necessary to import power from neighbouring Tajikistan,

Turkmenistan, and Uzbekistan at much lower cost than diesel powered sources of electricity. In 2011, 44% of

all imported electricity went to the NEPS, according to AEIC, with Kabul receiving 76% of its power  via the

 NEPS grid.(

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S our ce : Bryan Chri st i e  D e s ign , S p ec t ru m .i eee .org , 2011 . 

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Afghanistan has evolved from energy exporter , exporting natural gas to the Soviet Union in the 1970-80s, to a

country that imports the majority of its energy needs, according an article by the Journal of Energy and

Development  3 shows that the overall

domestic production from hydro and thermal plants has been on a decline, whereas electricity imports from

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neighbouring countries, particularly Uzbekistan, have skyrocketed.6  Data from AEIC shows that in 2011,

electricity  imports constituted almost 73%   whereas in 2006, imports

only represented 33.5% of the total energy consumed.

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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.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2006 2007 2008 2009 2010 2011

   !   "    #

Hydro

Thermal

Import

TOTAL

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Afghanistan is estimated to need around 3,000 MW, about five times the overall current supply, to satisfy the

r at DABS, Abdul Razique Samadi. 

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Development and Application of an Approach to Optimize Renewable

Energy Systems in Afghanistan frequent energy shortages and blackouts caused by insufficient or

dilapidated infrastructure oblige Afghans to rely on electricity produced by costly diesel generators, which can

only be used a few hours a day. A N e w Yor k    Ti m e s  article demonstrates the cost difference among various

sources by noting that diesel fuel trucked into a war zone translates into operating costs of around forty cents

(USD) per kilowatt-hour (kWh)7, compared to six cents per kWh imported over transmission lines from

Turkmenistan, Uzbekistan or Tajikistan. Moreover, electricity generation cost from domestic  sources,

including hydro, gas and coal was less than three cents/kWh, according to DABM data from 2007. Yet more

expensive electricity production from diesel power plants has  almost tripled  from 48 million kWh in 2009-

2010 to 128 million kWh in 2011-2012, reported the Afghanistan Statistical Yearbook 2011-2012. Kandahar  

 province and Kabul accounted for the vast majority of this consumption, with 102 million kWh and 12 million

kWh, respectively, in 2011-2012. The increasing dependence on diesel fuel poses an issue considering that

Afghanistan does not have an  operating refinery  and therefore has to import all petroleum products, notes

ANSD. The Statistical Yearbook says Afghanistan consumed approximately 1,300,000 tons of state-supplied

fuel  in 2011-2012 including diesel, petrol and other fuels. Table 2 below sums up the main origin of

 fuel imports. 

84&6$()   '5( 3(J1$0$6(4/@(R$5' 6(3 '()*++9)*+)(>8 //$0?(

Country Diesel Petrol

Iran 74,876 23,715

Az e rbaijan 363 10,171Kaza k  h st an 33,489 42,792

Pa k  i st an 56,294 12,237

Ru ss ia 211,768 67,522

S audi Arabia 171 0

Taji k  i st an 32,823 56,902

Uni t e d Arab E m ira t e s   215 0

Tur k  m e ni st an 157,402 210,395

Uzb ek  i st an 181,133 0

Total 748,539 423,736

S our ce : Co m pil e d by t h e  Au t hor f  ro m  Af  ghani st an S t a t i st i c al Y e arboo k   2011-2012 . 

As the price of kerosene, petrol and diesel continues to rise on the international market, diesel-generated

electricity is also becoming increasingly expensive, points out a German government report. Diesel prices in

Afghanistan are linked to the specific security and geographic characteristics of the country. For instance, data

from April 2012 reported by Pajhwo k   Af  ghan N e w s  indicates that a litre of diesel and petrol at fuel stations

" A kilowatt-hour (kWh) is a unit of electric energy produced by one kilowatt operating or producing electricity for one hour. 

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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

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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 .

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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

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 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.

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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

turn, economic growth Toward Self-Reliance: Strategic

Vision for the Transformation Decade. The December 2011 study by the US Geological Survey (USGS)

estimated that Afghanistan is endowed with potentially exploitable reserves or 1,596 billion barrels of oil and

36.462 trillion cubic feet of natural gas, with the Amu Darya Basin and the Afghan-

8/10/2019 AFGHANISTAN-Sustainability of Energy Supplies

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 To harness this potential,

energy sector requires investment. However, a ional security at the

Brookings Institution and a me   External Advisory Board at Central

Energy investments have to have [foresight], and most people are not bullish

about Afghanistan post-2015.    

Lastly, as the Afghan Energy Sector Strategy points out, despite the strong correlation between electricity

consumption and economic growth, a sufficient and sustainable supply of commercial energy is a necessary

 but not a sufficient condition  for economic development. Essentially, provision of energy must be

accompanied by other state-building interventions , weakened by decades of war, is

to be revitalised.

8/10/2019 AFGHANISTAN-Sustainability of Energy Supplies

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Readers interested in this issue may wish to refer to the following documents, several of which have been

specifically referenced in the preceding text.

  A Better Investment Climate for Everyone

and Development / The World Bank, 2005.

  Afghanistan National Development Strategy: Energy 1387   1391 (2007/08   2012-13),Volume II, Pillar

Islamic Republic of Afghanistan: Ministry of Economy, February 2008.

  Afghanistan National Development Strategy: Prioritization and Implementation Plan, Mid 2010     Mid

 

  Understanding Markets in Afghanistan: A Study of the Market for Petroleum Fuels

Afghanistan Research and Evaluation Unit, 2005.

  Afghanistan Statistical Yearbook 2011-12  2012.

  Imports by country and commodity 2012-12  

  Fiscal Year 2011 Afghanistan Infrastructure Fund Projects Are behind Schedule and Lack

Adequate Sustainment Plans Special Inspector General for Afghanistan Reconstruction, July 2012.

  Afghanistan Energy Supply has Increased but an Updated Master Plan is Needed and Delays and

Sustainability Concerns Remain anuary

2010.

  Quarterly Report to the United States Congress

Reconstruction, July 2012.