The Asian Development Bank (ADB) has agreed to provide approximately $1.2bn fund to support ongoing energy projects in Afghanistan.
The grant will be used to improve energy supply and power sector efficiency, as well as promote cross border trade in energy.
ADB is providing $750m through Special Funds resources and $450m from Afghanistan Infrastructure Trust Fund.
The funds will be provided in multiple tranches, with the first tranche of $275m expected to be released by the end of this year. The remaining tranches will be provided in phases up to 2025.
ADB Central and West Asia department senior energy specialist Asad Aleem said: "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.
"This assistance will support the government’s national energy supply programme of more than $10bn, which aims to expand power supply to boost economic growth and cut poverty."
The bank will provide funding for the last missing links for an expanded Turkmenistan-Afghanistan power interconnection in its first tranche.
The funding will be used to construct around 300km of a 500kV transmission line that will link Sheberghan and Dashte Alwan, as well as 60km of a 220kV line from Andkhoy to Sheberghan.
Funding from remaining tranches will be used for further transmission network upgrades, as well as developing domestic renewable energy projects to enhance domestic gas production and imports through Turkmenistan-Afghanistan-Pakistan-India gas pipeline.
According to ADB, it is the Afghanistan’s largest development partner in the energy sector with cumulative grant assistance of about $2.2bn.
Image: ADB will provide $1.2bn fund to support ongoing energy projects in Afghanistan. Photo: courtesy of Asian Development Bank.