The ADB approved $1.2 billion in grants to bolster the Afghan energy sector to be distributed in tranches over the next decade. The bank sees energy demand growing by nearly twice the rate of the economy in Afghanistan, though nearly all of its supplies come from neighboring countries.
“The national grid is also not synchronized with the systems of the four countries — Iran, Tajikistan, Turkmenistan, and Uzbekistan — which Afghanistan imports power from, resulting in higher costs and reduced reliability of supply,” the bank said.
Last month, a consortium of Turkish and Afghan energy companies reached a preliminary agreement with the Afghan Ministry of Mines and Petroleum to review the potential for natural gas work in the northwestern provinces of Faryab and Jawzjan. The Afghan government estimates current gas production at around 1.5 million cubic feet, about 70 percent less than the entire production from the Marcellus shale formation in the United States.
“Insufficient energy supplies and a demand–supply imbalance constrain growth and income opportunities and create economic disparities that can fuel ethnic and regional tensions and insecurity,” Asad Aleem, a regional energy specialist for the ADB, said in a statement.
Initial grant distributions from the ADB will fund construction of a power grid tied to Turkmenistan. Later assistance will target renewable energy sector development and projects tied to the planned Turkmenistan-Afghanistan-Pakistan-India gas pipeline.
The pipeline will draw on the Galkynysh natural gas field near the border of Afghanistan, one of the largest gas fields in the world.