Afghanistan receives $1.2bn ADB grant to improve energy infrastructure

7 Dec 15

The Asian Development Bank has confirmed $1.2bn in grants to support new and ongoing energy projects in Afghanistan.


The funding will be used to support the government’s national energy supply programme, which aims to expand power supply to boost economic growth and cut poverty.

The country currently relies on energy imports, but its national grid is unsynchronised with the countries it imports from, which increases costs and makes the country’s supplies vulnerable and unreliable.

Energy demand in Afghanistan rose by almost double its economic growth rate between 2005-12, but around 80% of its total supply is imported.

Asad Aleem, senior energy specialist in the ADB’s Central and West Asia Department, 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.”

The ADB support will therefore be used to increase the country’s connectivity with neighbours as well as improving transmission networks, support renewable energy projects and boost domestic gas production

The grants include $750m from the ADB’s Special Funds resources and up to $450m from the Afghanistan Infrastructure Trust Fund. Funds will be dispersed in multiple tranches, with the first $257m earmarked for release this year. Remaining tranches will follow through to 2025. 

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