ADB Grants 44.76 Million Dollars Loan to Develop Solar Power Plant in Afghanistan

The new on-grid solar power generation project will not only provide access to a clean and reliable power supply, but also demonstrate the viability of future renewable energy investments through public-private partnerships.

The Asian Development Bank (ADB) has approved a $44.76 million grant to develop Afghanistan’s first 20 megawatts on-grid solar power plant and boost the country’s renewable energy generation and supply.

“The demand for power is rapidly growing across Afghanistan and economic development and income opportunities depend on sufficient energy supplies,” said Samuel Tumiwa, ADB Country Director for Afghanistan. “The new on-grid solar power generation project, which is the largest of its kind in Afghanistan, will not only provide access to a clean and reliable power supply, but also demonstrate the viability of future renewable energy investments through public-private partnerships.”

Despite significant progress since 2002, Afghanistan still relies on energy imports from neighboring countries to meet its domestic demand. Only about 32% of the population has access to grid-connected electricity and the demand for electricity in major load centers is growing by 25% annually. Reliance on energy imports, lack of enough power generation capacity, small domestic market, and financing weaknesses leave energy security highly vulnerable.

Afghanistan’s renewable energy resource potential is estimated to be over 300,000 MW, with over two-thirds of potential supply coming from solar power, with the country benefitting from about 300 sunny days annually.

The project will finance the construction of a 20 MW on-grid solar power plant in Naghlu, located in the capital Kabul’s Surobi district. The project will generate at least 43,000 megawatt-hours of solar power and avoid at least 13,000 tons of carbon dioxide equivalent in the first full year of operation.

The project will partially fill the demand-supply gap and improve sustainability of the northeast grid covering Kabul, Nangarhar, and Laghman provinces. In addition, the project will provide power transformer and support facilities, upgrade the capacity of the existing substation, and operation and maintenance services for 3 years. The project will also prepare the site and substation to accommodate 10 MW of additional photovoltaic plant for future financing. The project may be expanded to 30 MW or 40 MW if additional financing from other development partners or the private sector is realized.

Capacity building support will be also provided for the Ministry of Energy and Water, and government-owned energy utility Da Afghanistan Breshna Sherkat staff on solar power plant design, technical evaluation, grid integration, and operation and maintenance. The project is in line with the targets of the National Energy Supply Program of the Government of Afghanistan and the Afghanistan Renewable Energy Policy.

Over the coming years, ADB will support the increase in the country’s electrification rate from 30% to 83% and lift the share of domestic generation from 20% to 67% by 2030. ADB will also play a major role in power transmission both regionally and domestically, and promote clean energy, including through solar power.

Source: ADB