The financing, which includes $750m from the bank’s Special Funds resources and up to $450m from the Afghanistan Infrastructure Trust Fund, will boost energy supply, improve power sector efficiency, and promote cross border energy trade.
ADB plans to provide the funds in several tranches through 2025 with the first tranche of $275m planned in this year.
In the initial tranche, the bank will fund the last missing links for an expanded Turkmenistan-Afghanistan power interconnection, enabling the country to increase electricity imports from its neighbor.
The project involves construction of more than 300km-long 500kV transmission line linking Sheberghan to Dashte Alwan, as well as 60km-long 220kV line from Andkhoy to Sheberghan.
The funds will also be used by the state power utility Da Afghanistan Breshna Sherkat to develop a business plan and tariff framework.
The country plans to use the subsequent loan tranches to fund further transmission network upgrades, support development of renewable energy projects, measures to increase both domestic gas production and imports via the Turkmenistan-Afghanistan-Pakistan-India gas pipeline.
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 program of more than $10bn, which aims to expand power supply to boost economic growth and cut poverty."
The Afghanistan government, through its national energy supply program, aims to increase electrification rate to 83% from current 30% and also boost the domestic generation share from 20% to 67% by 2030.
Image: Afghanistan plans to upgrade transmission network and develop renewable energy projects. Photo: courtesy of Asian Development Bank.
