ADB Grants $4Mn Loan For 15.1 MW Solar Plant in Afghanistan

The Asian Development Bank (ADB) has signed a $4 million loan with a special purpose vehicle (SPV) to help build a 15.1 megawatt (MW) solar power plant in Afghanistan.

The Asian Development Bank (ADB) has signed a $4 million loan with a special purpose vehicle (SPV) and subsidiaries owned by the 77 Construction, Contracting, and Trading Group (77 Group), an international civil works contracting firm headquartered in Turkey, to help build a 15.1 megawatt (MW) solar power plant and promote the development of renewable energy in Afghanistan.

The borrower is Barakat Kandahar Solar Energy (BKSE), an SPV majority owned by 77 Afghanistan, a subsidiary of 77 Group. The co-borrowers include three subsidiaries of 77 Group.

“Having a stable, sustainable, and reliable energy source is important for the growth and development prospects of Afghanistan, where power generation and access is one of the lowest in the world,” said Senior Public–Private Partnership specialist at ADB’s Office of Public-Private Partnerships, Mohammed Azim Hashimi. “ADB’s support for this important project will help provide long-term financing that is not available locally to build and operate a state-of-the-art solar power plant in Afghanistan.”

The Kandahar Solar Power Project will install a 15.1 MW solar PV power plant and related facilities, increasing the supply of clean power to the domestic grid in Afghanistan. The power plant will generate about 27.5 gigawatt-hours of electricity annually and avoid 8,500 tons of carbon dioxide emissions. It will also help lift the share of renewable energy in the country’s total installed power generation capacity to between 4,500 MW and 5,000 MW by 2032. ADB will also administer a $3.85 million loan from the Canadian Climate Fund for Private Sector in Asia II (CFPS II) for the project.

“77 Group would like to thank ADB for paving the way for investors in Afghanistan by supporting the first private sector-financed independent power producer,” said 77 Group representative and project director Burak Unsal. “77 Group is keen to work with ADB on future renewable energy investment projects.’’

Afghanistan ranks in the bottom 5% in terms of per capita electricity usage, with only 30% of the country’s population connected to the grid in 2015. In terms of the energy mix, solar power accounts for only about 1% or 3 MW of the country’s total installed generation capacity. This is despite Afghanistan having about 220,000 MW of solar power generation potential. The Government of Afghanistan aims to develop the country’s renewable energy generation, including solar power, so it can contribute at least 5,000 MW (40% share) to the national grid by 2032.