Power to the People:
Afghanistan Holds Key to Ambitious Plan for Regional Energy Development

Mar 31, 2008 - International Herald Tribune

Haze drapes the surrounding mountains as a U.S. military convoy swerves into this town on a late wintry afternoon. The streets are lined with faces that are wary to borderline hostile. This is Ghazni, a province too dangerous for humanitarian workers to enter, which gained notoriety last year when 23 South Korean missionaries were kidnapped here.

When the convoy stops, a crowd of boys and old men swells around Dr. Ramey Wilson, an Army battalion surgeon.

"What do you folks need around here? Children immunized? Any problems with eye diseases? Need good schools? Schools for the girls?" Wilson calls out. No, we have all that, the crowd answers back.

One by one, a chorus of the older voices builds, as the men press forward.

"What we need is electricity," they say, through Wilson's Afghan translator. "To power computers. For our children. To connect to the Internet."

U.S. forces are trying to foster economic development across several provinces south of Kabul, extending in a triangle southeast from Ghazni some 250 kilometers, or 150 miles, to the border with Pakistan. With the help of provincial reconstruction teams and the U.S. Agency for International Development, they are building roads to connect villages to local markets and to improve communications between provincial cities like Ghazni, Gardez amd Khost.

But building roads is one thing; building and protecting more vulnerable infrastructure, like electricity and telecommunications networks is another. In four recent weeks, cellphone towers were struck by Taliban insurgents nine times, according to Nic Lee, director of the Afghanistan NGO Safety Office, a project to promote the security of aid and humanitarian workers.

Reported attacks on the country's electricity infrastructure have been relatively few in recent years, according to the Memorial Institute for the Prevention of Terrorism, a U.S. organization that tracks terrorist activity. But that could quickly change, if there were more electricity infrastructure to attack.

Still, despite the risks, plans are inching along to supply more power to Afghanistan from neighboring countries. Next month, in Islamabad, government representatives from Tajikistan, Kyrgyzstan, Afghanistan, and Pakistan are scheduled to meet to make a final economic assessment of a $500 million project to build a 1,300 megawatt, high-transmission power line from the two central Asian countries through Afghanistan and across the Khyber Pass to Peshawar, in Pakistan.

The line would supply 1,000 megawatts to Peshawar and 300 megawatts to Kabul, where chronic power shortages mean residents get only about three to four hours of electricity a day.

The project, backed by financing from The World Bank, Asian Development Bank and Islamic Development Bank, would be the first step toward a planned Central Asia-South Asia regional electricity market, or Casarem.

The U.S. government supports the plan as a way to promote economic integration and regional stability.

If implemented, it would link the two central Asian countries to the south Asian grid for the first time, initially to take surplus electricity during the summer months from hydropower plants in central Asia, and export it to Pakistan, where robust economic growth and a 10 percent annual rise in power demand are creating a large and growing supply deficit.

Down the road, the project's supporters hope to extend the grid by building a connection to India, where strong economic growth is also causing a worsening power crunch. India has expressed interest in participating at a later stage, said Sunill Khosla, an energy specialist with the World Bank in Kabul.

Tajikistan and Kyrgyzstan have large, and largely untapped, hydro resources. Tajikistan's potential could be as great as 40,000 megawatts and Kyrgyzstan's some 26,000 megawatts, energy analysts say.

In both countries, however, the lack of a strong domestic market has held back hydropower development. The Casarem project could therefore play an important role in stimulating new plant construction.

"There is a very clear incentive for all four countries to work together to make this happen," said Rune Stroem, energy specialist at the Asian Development Bank. "Electricity is the raw material for economic growth of the region."

As a part of the project, Afghanistan would also receive transit fees.

In the initial planning, the three development banks are evaluating the capacity of existing hydro plants to furnish power for the transmission line, which could be up and running by 2010.

The banks expect the initial project to be fully financed by themselves and the four governments, with private sector involvement coming in a later phase.

An advertisement seeking expressions of interest in Casarem last year generated inquiries from 35 companies. But bank specialists said they expected the private sector to invest later rather than sooner - mainly in building new power plants and transmission lines in central Asia, including in Turkmenistan and Uzbekistan.

Until now, Russian companies have been the dominant investors in central Asian electricity, and energy analysts say they expect the Russian power monopoly RAO UES to play a major role in future projects. The U.S. power company AES, which already operates in Kazakhstan, could also be a player, they said.

Chinese companies, too, may participate in Casarem, to export electricity to Xinjiang, said Sebastien Peyrouse, a central Asia expert, in an analysis last year for a studies program at Johns Hopkins University.

Half the provinces of China face regular power shortages, Peyrouse said, and the state-run Sinohydro, the principal hydroelectric power constructor in China, has signed a deal to develop the Yavan power station in northern Tajikistan.

Iran, too, is developing central Asian energy resources. In August an Iranian company, Sangab, working for the Iranian government, started construction of the Sangtuda-2 hydropower plant in Tajikistan.

With oil prices cresting recently above $110 a barrel, energy companies are looking everywhere for new sources. "Everything is bubbling all over," Stroem said, although that could cut both ways, if it diverted investment away from central Asia to other locations, he noted.

In any case, developing generating capacity serves little purpose without a transmission grid: and to open South Asia to the central Asian generators, "electricity corridors come up against the Afghan question: as an essential transit point for any expansion to the south, its political instability has largely put the brakes on developing cooperation," Peyrouse said.

The Afghan government proposes to deal with that issue by providing power to some communities along the route of the proposed Casarem transmission line, to build popular support for the project by spreading the benefits. Among the first beneficiaries would be commercial centers like Mazar-e-Sharif and Jalalabad, said Khosla, the World Bank's energy specialist.

But Afghanistan also needs an emergency response system to deal with a terrorist attack on its electricity infrastructure, said a U.S. development official who requested anonymity because he was not authorized to speak on the matter. Afghanistan currently has no such system, he said.

Beyond the lack of an emergency response system lies a larger issue, added Johannes Linn, executive director of the Wolfenson Center for International Development. While the benefits of Casarem project are fully recognized, the full risks may not be.

"The project doesn't address the larger question: 'What if Afghanistan falls entirely?' " Linn said.

Originally published by The New York Times Media Group.

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