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Afghanistan,Philippines : ADB Private Sector Deal to Promote Solar Power in Afghanistan

Publish Date : 23-May-2019

The Asian Development Bank (ADB) has signed a $4 million loan with a special purpose vehicle and subsidiaries owned by the 77 Construction, Contracting, and Trading Group (77 Group), an international civil works contracting firm headquartered in Turkey, to help build a 15.1 megawatt (MW) solar power plant and promote the development of renewable energy in Afghanistan.

The borrower is Barakat Kandahar Solar Energy (BKSE), a special purpose vehicle majority owned by 77 Afghanistan, a subsidiary of 77 Group. The co-borrowers include three subsidiaries of 77 Group. The agreement was signed by Principal Investment Specialist at ADBs Private Sector Operations Department Ms. Sonali Tang, and Chairman, BKSE, and owner of 77 Group Mr. Suleyman Ciliv.

Having a stable, sustainable, and reliable energy source is important for the growth and development prospects of Afghanistan, where power generation and access is one of the lowest in the world, said Senior PublicPrivate Partnership specialist at ADBs Office of PublicPrivate Partnerships Mr. Mohammed Azim Hashimi. ADBs support for this important project will help provide long-term financing that is not available locally to build and operate a state-of-the-art solar power plant in Afghanistan.

77 Group would like to thank ADB for paving the way for investors in Afghanistan by supporting the first private sector-financed independent power producer , said 77 Group representative and project director Mr. Burak Unsal. 77 Group is keen to work with ADB on future renewable energy investment projects.

Afghanistan ranks in the bottom 5% in terms of per capita electricity usage, with only 30% of the countrys population connected to the grid in 2015. In terms of energy mix, solar power accounts for only about 1% or 3 MW of the countrys total installed generation capacity. This is despite Afghanistan having about 220,000 MW of solar power generation potential. The Government of Afghanistan aims to develop the countrys renewable energy generation, including solar power, so it can contribute at least 5,000 MW (40% share) to the national grid by 2032.

The Kandahar Solar Power Project will install a 15.1 MW solar photovoltaic power plant and related facilities, increasing the supply of clean power to the domestic grid in Afghanistan. The power plant will generate about 27.5 gigawatt-hours of electricity annually and avoid 8,500 tons of carbon dioxide emissions. It will also help lift the share of renewable energy in the countrys total installed power generation capacity to between 4,500 MW and 5,000 MW by 2032.

ADB will also administer a $3.85 million loan from the Canadian Climate Fund for Private Sector in Asia II (CFPS II) for the project. CFPS II was established in March 2017 to support greater private sector participation in climate change mitigation and adaptation in low and lower middle-income countries in Asia and the Pacific.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members49 from the region.

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