Central Asia to Power Afghanistan and Pakistan with Electricity

Energy-poor Afghanistan and Pakistan are to be the beneficiaries of an ambitious international project to transmit electricity generated from hydroelectric cascades in Kyrgyzstan and Tajikistan to their South Asian neighbors, in a win-win situation for both producers and consumers.

The electricity that will be transferred to these countries will help them out a lot in various situations. Electricity is one of the most important things for mankind because our lives cannot work without it, the entire world would not function properly without it. that’s why it is so important to give electricity to people who are in need, it will further help them develop their own power stations in the future, of course for that to happen money and power are needed.

The electricity transmission line CASA-1000 (Central Asia – South Asia – 1000) project began on Nov. 16, 2007, when Afghanistan, Pakistan, Kyrgyzstan, and Tajikistan signed a memorandum of understanding in Kabul. Three months later, on Feb. 25, 2008, the World Bank (WB) issued its “Project Information Document” (PID), “World – Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000).”

As then envisaged, CASA-1000 was a project emanating from efforts dating back to 2005 by Tajikistan, Kyrgyzstan, Afghanistan, and Pakistan to develop a Central Asia South Asia Regional Electricity Market (CASAREM) in conjunction with International Financial Institutions (IFIs). Besides the WB, other potential IFI lenders included the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and the Islamic Development Bank (IDB).

The CASAREM concept was envisaged as developing electricity trade among the four Central and South Asian countries through a set of projects with the relevant investments, supported by related institutional arrangements and legal agreements. In the future, other countries could join the CASAREM initiative as the electrical trade expanded.
The premise of the project was simple – Kyrgyzstan and Tajikistan would transmit surplus electricity via a 1,000 megawatt (MW) high-voltage cable network to Afghanistan and Pakistan.

CASA-1000 faced a number of obstacles before it could begin, however, including Kyrgyzstan and Tajikistan lacking the potential to exploit their full hydroelectric capacities because of a lack of significant financial resources needed to develop their hydropower plants and associated transmission lines, compounded by limited regional cooperation; and a lack of clarity about the main electricity export market.

The WB PID quickly attracted the support of Tajikistan, Kyrgyzstan, Afghanistan, and Pakistan. On May 11, 2009, after meeting in Washington DC with World Bank Group President Robert B. Zoellick, Afghan President Hamid Karzai and Pakistani President Asif Ali Zardari issued a joint statement pledging their support for the CASA-1000, regional electricity transmission project, which the WB PID had estimated would cost $680 million. The Joint Statement said that Karzai and Zardari “recognized that the completion of CASA-1000 – which is being designed to accommodate an expanded volume of power in the future – will catalyze additional energy investments and trade both in the four CASA countries as well as in the region, and that it could have a positive demonstration effect for other regional infrastructure projects between their two countries.” Zoellick said, “The Central Asian Republics, with large energy resource potential, are well placed to help energy-constrained South Asia, while still meeting their own domestic energy needs. This project promises to bring substantial benefits for all four countries and could usher in a new era of regional cooperation that would promote sustained growth and help overcome poverty.”
The WB PID postulated that CASA-1000’s physical infrastructure would probably consist of a 500 kilovolt (kV) High Voltage Direct Current (HVDC) transmission system between Tajikistan and Pakistan through Afghanistan along with an alternating current (AC) transmission link from Kyrgyzstan and Tajikistan to connect to the HVDC line from Tajikistan to South Asia, as well as the necessary electricity sub-stations in Kabul, Peshawar and Tajikistan’s Sangtuda.

As for the benefits of CASA-1000, the WB PID noted, “Realization of CASA-1000 would – in addition to the direct economic benefits to the countries involved — usher in a new era of regional cooperation, with its attendant benefits and demonstration effects for other projects. It would enable further development of Central Asian energy resources (hydropower, gas, coal) at a scale that would not otherwise be feasible, and thereby ensure that the export levels increase with the new generation assets coming on stream. Importantly, the linking of the Kyrgyz Republic with Tajik system through high voltage lines could help break the ‘Water-Energy Nexus’ that exists in the Syr Darya basin. Since Pakistan would buy the summer electricity, Kyrgyz could use the waters in summer from Toktogul reservoir both to generate electricity and to meet the irrigation needs of Kazakhstan and Uzbekistan; in absence of the electricity exports, such water releases are less economic to the Kyrgyz Republic. The transmission links and access to export markets would enable the Kyrgyz Republic to develop its own resources (hydro and coal).”

CASA-1000 received additional international support when on May 27, 2009, Kyrgyz Prime Minister Igor Chudinov met with Turkish President Abdullah Gul in Bishkek and told him, “We will be happy if the Turkish side takes an interest in our projects in the field of energy generating,” proposing to attract Turkish investment to the CASA-1000 and adding that the Kyrgyz side was ready to submit 90 projects on construction of small hydroelectric power stations to Turkish businessmen for consideration.

The project received a further boost when on July 30, 2009, Karzai and Zardari met in Dushanbe with Tajik President Emomali Rahmon and Russian President Dmitry Medvedev, with the quartet signing a statement that called for closer economic cooperation between the four countries and for international financial organizations to consider providing financing for CASA-1000.

Seeking government funding further afield, during a meeting on Nov. 3, 2009 in Dushanbe, Tajik Foreign Minister Hamrokhon Zarifi told the Japanese ambassador to Tajikistan, Tsutomu Hiraoka, that “the time has come to expand horizons of cooperation” and called on Japan to participate in the construction of hydroelectric power stations and power transmission lines in Tajikistan, including CASA-1000. Zarif received a noncommittal reply, with Hiraoka responding that the Japanese government was aware of water and energy problems in Central Asia and would take measures to provide assistance in resolving these problems.

The year 2010 opened with regional optimism, as on Jan. 20 the Tajik parliament’s lower house, Assembly of Representatives, ratified an agreement between Tajikistan, Afghanistan, Pakistan and Kyrgyzstan to draw up a project on implementing CASA-1000.

The following month Afghanistan endorsed a more modest project with Tajikistan, the $27.7 million, 220-kV Sangtuda-Pole Khomri power transmission line, being implemented by an Indian company in Afghanistan, to be built by the end of the year. Afghan Minister of Water and Energy Mohammad Esmael Khan told a news conference in Dushanbe following his meeting with Rahmon that after the Sangtuda-Pole Khomri comes online, Tajik electricity exports to Afghanistan would rise to 300 MW, noting, “After the line is constructed, electricity from Tajikistan will be supplied up to the Afghan capital Kabul via Takhar and Baghlan provinces. Then the project will be continued up to the Pakistani border.” Khan added, “Tajik and Afghan energy officials will soon begin to discuss the CASA-1000 project in Afghanistan, the implementation of which will make it possible to increase Tajik electricity imports. We are importing electricity from Tajikistan, Turkmenistan, Iran, and Uzbekistan. Taking into account the fact that the annual electricity consumption will reach 4,000 MW in Afghanistan in the future, we are interested in implementing hydroelectric power projects in the region, in particular in Tajikistan.”
The next three years would see a similar flurry of meetings and grandiose pronouncements, but little else.

So why, six years after it was first proposed, is CASA-1000 still not built?

The answer is a simple one – cost. The Feb. 25, 2008, WB’s PID put the total cost for CASA – 1000 at $610 million – by mid-2011, the cost had risen to $953 million, with each participating nation to bear the cost of the facilities on its territory. Responsibility for national funding for CASA-1000 was – Afghanistan – $309 million; Kyrgyzstan – $196 million; Pakistan – $197 million and Tajikistan – $251 million. Not surprisingly, the consultants who developed the cost analysis estimated that the CASA-1000 project would need a minimum of 58 months to be completed, but added that the completion period could be extended by up to a further twelve months depending on a number of factors, including the timely selection of qualified commercial advisors for each of the countries involved – Projecting out from mid-June, 2011, that would give CASA-1000 a minimum completion date of April 2016, or a worst case scenario date of April 2017.

By 2014 CASA-1000’s projected cost had risen to $1.17 billion. But, despite the ballooning costs, six years after it was first proposed the CASA-1000 project at long last appears to have locked in definitive funding.

In March the World Bank Group Board of Directors approved $526.5 million in financing for the CASA-1000 engineering design, construction, and commissioning of transmission lines and three new converter stations, designed to build upon existing power generation stations.

On Oct. 27 President Rahmon met with IDB President Ahmed Muhammad Ali in Dushanbe, and it was announced that the IDB had agreed to finance the remainder of the CASA-1000 megawatt power import project.

Funding now is accordingly locked in for construction to begin. CASA-1000 will be a transformative project for both Central and South Asia, as it will: establish Afghanistan’s role as a viable transit country, enhancing its growth prospects; ensure a steady source of export revenues for Tajikistan and Kyrgyzstan, currently the two poorest post-Soviet Central Asian states; alleviate electricity shortages in Pakistan during the peak summer season, and set the stage for a much greater degree of energy trade between Central and South Asia. Finally, it is a project that both Russia and the U.S. support, no small consideration in a time of worsening Western-Russian relations.