The Ministry of Finace (MoF) in a statement said Minister of Finance Eklil Hakimi and Mr. Thomas Panella, Director of Asian Development Bank (ADB) signed the second installment of $415 million grant agreement to boost Afghanistan’s energy supply and strengthen the country’s cross-border trade in energy.
The statement further added that assistance includes $188.23 million from the ADB Asian Development Fund; $225.77 million in co-financing from the Afghanistan Infrastructure Trust Fund supported by the Governments of Belgium, Canada, Germany, the Netherlands, and the United States; and $1 million from the People’s Republic of China Regional Cooperation and Poverty Reduction Fund. Government of Afghanistan will also allocate $5 million for the second installment of this project from its own internal resources.
“We are grateful for the continued support of ADB to the energy sector in Afghanistan,” said Eklil Hakimi, Afghan Minister of Finance. “Energy is one of the government’s priority sectors and a foundation for economic growth. The Government of Afghanistan and ADB will continue working closely to develop the energy sector for the improved livelihoods and welfare of all Afghans.”
“Insufficient energy supplies severely constrain economic development and income opportunities across Afghanistan,” said Thomas Panella, ADB Country Director in Afghanistan. “This assistance will support the government’s national energy supply program, which will expand power supply to boost economic growth, provide employment, and reduce poverty.”
According to the statement, Afghanistan has seen energy demand grow by almost twice its economic growth rate from 2005 to 2012, with the country sourcing around 80% of its total supplies from neighboring countries as an immediate solution.
The Afghan power system is not synchronized, however, with the systems of Iran, Tajikistan, Turkmenistan, and Uzbekistan, from which Afghanistan imports power, so technical measures are required to allow Afghans to utilize the power imports.