ADB to Provide $44.76 Million Grant to Develop 20 MW of Grid-Connected Solar in Afghanistan

The Asian Development Bank (ADB) has agreed to provide a $44.76 million (~₹2.88 billion) grant to help develop 20 MW of grid-connected solar in Afghanistan. The grant was approved by ADB on November 26, 2017.

The grant will be used to finance the construction of a 20 MW on-grid solar photovoltaic (PV) project in Naghlu, located in Kabul’s Surobi district. The project will generate at least 43,000 MWh of solar power and avoid at least 13,000 tons of carbon dioxide equivalent emissions in its first full year of operations.

“The demand for power is rapidly growing across Afghanistan and economic development and income opportunities depend on sufficient energy supplies,” said Samuel Tumiwa, ADB’s 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,” added Tumiwa.

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

The country’s renewable energy resource potential is estimated to be more than 300,000 MW. More than two-thirds of that is attributable to solar, with the country benefitting from about 300 sunny days annually.

The 20 MW solar project will partially fill the gap between supply and demand while improving the sustainability of the northeast grid that covers the provinces of Kabul, Nangarhar, and Laghman. The project will be developed so that 10 MW of additional capacity can be added later with the addition of future financing. The entire project capacity is expandable to 30 MW or 40 MW if more financing from other development partners or the private sector can be realized.

In addition to the grant, ADB will also provide support for solar photovoltaic plant design, technical evaluation, grid integration, and operation and maintenance for the Ministry of Energy and Water as well as government-owned energy utility Da Afghanistan Breshna Sherkat.

ADB is Afghanistan’s largest on-budget development partner in the energy sector and it has helped to deliver electricity to more than 5 million Afghans. In coming years, ADB plans to support an increase in the country’s electrification rate to 83 percent from 30 percent and lift the share of domestic generation to 67 percent from 20 percent by 2030. ADB also plans to play a major role in power transmission both regionally and domestically, and to promote clean energy, including through solar power.

ADB is focused on Asia’s renewable energy market. It recently approved a spate of grants and loans for renewable energy projects, specifically solar, in Bangladesh, Sri Lanka, and India.