The Asian Development Bank (ADB) is providing a US$3M technical assistance grant to study the potential for regional electricity trading that would help optimize utilization of power resources in both Central and South Asia.

The feasibility study will prepare a proposed power trading project that would, in its initial stages, earn revenues for the Kyrgyz Republic and Tajikistan by allowing them to initially export 1000MW of electricity to Afghanistan and Pakistan, where there are significant energy shortages.

The ADB, European Bank for Reconstruction and Development, Islamic Development Bank, and World Bank along with bilateral and private sector stakeholders have been participating and assisting the Multi-Country Working Group in their consideration of the project.

‘Although there is some existing interconnection between Afghanistan and Central Asia, and additional bilateral projects are under development, there is considerable scope for expansion of regional cooperation in the power sector,’ said F C Kawawaki, an ADB Senior Investment Specialist. ‘This project marks the beginning of the process to bring the demand and supply sides together.’

The study will look into the feasibility and viability of the proposed project, including assessment of power availability and demand in the countries, possible transmission routes, economic and financial costs, and environmental and social safeguard assessments.

The countries have also requested the World Bank to provide technical assistance focusing on the Commercial Assessment study, which together with ADB’s assistance will be utilized by the four countries to determine the way forward.