Javid Sadaat September 3 2015 Afghanistans historical power supply GWh GWh 78 of power supply relies imports Imports Domestic 916 923 915 1073 1114 2455 3022 3129 ID: 804965
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Slide1
Promoting Private Investment in Afghanistan’s Power Sector
Javid Sadaat
September
3,
2015
Slide2Afghanistan’s historical power supply(
GWh
)
(
GWh
)
)
78% of power supply relies imports
)
Imports
Domestic
916
923
915
1073
1114
2455
3022
3129
3881
4169
Current
domestic power supply is around 1,073GWh (operational capacity of 470MW) or 22% of total supply Power imports from Central Asia account for 78% of total supply Domestic power generation is crucial for Afghanistan’s future development Uncertainty over long-term availability of imported power and the expected increase in future demand
Rationale:Severe Power Shortage & Heavy Reliance on Imported Power
Power Supply by Sources (2014)
30%
10%
15%
22%
22%
Slide3Project Overview:Key Highlights
Location
Close to existing Northern Fertilizer Power Plant (NFPP) site at
Kude
-Berg
near
Mazar
-e-Sharif (subject to further discussion with stakeholders)Size50MW / c. 380GWh (phased with expansion potential) – will equate to around 30% of Afghanistan’s current indigenous power supplyFuel
Natural Gas from Sheberghan via existing pipeline, need for 300,000 mcm/dayPower Purchase AgreementOff-take agreement with DABS for 20 years
Electricity tariffPreliminary estimate at 7.5-9.5 Usc/kWh
Gas price at the Well-headUS$ 110-140 per mcm (subject to further discussion)Investors
Consortium of local investors including the Ghazanfar Group and Cummins Power Generation, with support from International Financial Cooperation (IFC)
Slide4Project Overview:Key Advantages
1
Certainly
of Long-term Electricity Supply
Mazar
IPP will add long –term year-round
certainty to Afghanistan’s domestic electricity supply and hence will result in significant economic benefits for the country
2Leverages Indigenous Natural Resources
Existing gas fields in Shberghan with increasing production, along with a refurbished pipeline with excess capacity will allow Mazar IPP to efficiently utilize the country’s natural resources 3
Strong Economic ViabilityMazar IPP will generate elctricity at less than the “true” cost of imported power in the country over the long-term
4Can Facilitate Increased Power Supply to KabulMazar IPP will meet a significant
portion of current local demand in Mazar region, hence making available imported power which was previously utilized locally, for increased supply to Kabul 5
Establishes a Template for future IPPsWith support from the World Bank Group, Mazar IPP will establish a balanced, sustainable and bankable project structure for future IPPs in Afghanistan
6Will Encourage Greater Interest in Afghanistan’s Power Sector Demonstrating
the success of one IPP in a relatively secure part of the country, will result in a significant increase in interest from local/international investors for future IPPs
Slide5Managing IPP:Key Elements
Best Practices
Thailand, Mexico and Egypt as “best practices” for IPP model
Transparency and Regulatory
Capacity
Improved transparency and regulatory capacity is
needed to manage the sector effectively
Reforming InstitutionsReforming the relevant institutions; e.g. AGERegulatory
BodyEstablishing an independent regulatory body to regulate the sectorEngaging Relevant InstitutionsEngage multi-lateral institutions to identify issues and obstacles to the concept
Develop a national energy planDevelop a national energy plan that prioritizes energy security and indigenous supply, and domestic manufacture
Slide6Thank You!