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Afghanistan to build first-ever gas-fired power plant

Afghanistan to build first-ever gas-fired power plant

Sep 22, 2016 - 20:26

KABULinfo-icon (Pajhwok): The government and the Ghazanfar Group on Thursday signed an agreement to create a framework for development and construction of a landmark gas-fired power plant near the capital of northern Balkh province.

The agreement was signed in Kabul between representatives of the Water and Energy Ministry and the group, a leading private Afghan conglomerate, in the presence of Chief Executive Officer Abdullah Abdullah.

Abdullah hailed the $175 million project as good news for Afghanistaninfo-icon and it would help the country towards achieving self-sufficiency in power sector.

He said if resources available in Afghanistan for power generation were properly utilized, Afghanistan would not only become self-reliant but would also export power to regional countries.

IFC, a member of the Worldinfo-icon Bank Group, in a statement welcomed the signing the Heads of Terms agreement.

The Mazar Independent Power Plant, a landmark project is expected to lead the way for private sector participation in addressing Afghanistan’s critical energy needs.

IFC, the International Finance Corporation, played a key role in developing the agreement, signed today in Kabul, the statement said.

The agreement set out key terms under which the Group would be contracted to build, own and operate a 50-megawatt gas-fired power plant near Mazar-i-Sharif and sell electricity over the next 20 years to Da Afghanistan Breshna Sherkat, the country’s national utility company.

When completed, the project will mark the first time a power plant in Afghanistan is fully financed, designed, built and operated by the private sector.

The facility aims to provide power to around 1 million Afghans and will boost the country’s power generation by around 30 percent, helping to address a severe power shortfall resulting from years of conflict and under-investment in infrastructure.

“Sustainable, long-term energy supplies are critical for the development of Afghanistan's economy,” said Professor Mohammad Qayoumi, Chief Energy Advisor to the President.

“This project will mark an important step in the country's efforts to build a privately funded power plant capable of serving the ever-growing demand for electricity.”

The plant will also be the first private power project to utilize domestically produced natural gas, and is expected to pave the way for greater collaboration between the Afghan government and the private sector to develop key infrastructure needed to boost the country’s economic growth.

“We hope this project will set a good example for private investment in the power sector in Afghanistan,” said Ismail Ghazanfar, CEO and Chairman of the Ghazanfar Group.

“It will also help build investor confidence to attract greater private capital and expertise for the development of Afghanistan.”

"In many conflict-affected states, governments do not have the resources to complete major infrastructure projects themselves," said Mouayed Makhlouf, IFC Regional Director for Middle East and North Africa.

“But the private sector can help. With their expertise and financial know-how, private firms can help bolster power supplies, improve sanitation, and build transport networks. Today's agreement is a milestone for Afghanistan and will pave the way for investments in the country's infrastructure."


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