Providing electricity to the scattered towns and villages of Afghanistan is probably one of the best ways of undermining the Taliban insurgency. Nothing can change the lives of most Afghans more than access to cheap, reliable power. So it is with a somewhat heavy heart that one reads the latest report from the Office of the Special Inspector General for Afghanistan Reconstruction (SIGIR).
With the snappy title, Afghanistan Energy Supply Has Increased but An Updated Master Plan Is Needed and Delays and Sustainability Concerns Remain the report doesn't exactly build high hopes of progress.
True, Afghanistan’s installed electrical capacity has increased in the last eight years by an estimated 139 percent, up from 430 megawatts (MW) in 2001 compared to 1,028.5MW in September 2009.
But that modest increase hides many problems. Afghanistan’s operational capacity (621.4 MW) - the amount of electricity that is actually used - is only 60 percent of its installed capacity. This is much less even than the amount of power used in the Washington DC area alone.
The reasons for this shortfall are many and varied. For example, the Afghanistan government lacks the capability to collect the revenue needed to fund current and expected fuel costs and operating and maintenance expenses. According to the Afghan Energy Sector Strategy, the energy sector lost $128.5m in revenue in 2005 due to poor commercial operations. USAID estimates that the Kabul Electricity Directorate alone lost approximately 60 percent or $125m in revenues in 2008 and without changes this loss could rise to $275m annually by 2015.
Then there is corruption. Corruption examples include extra fees for connections, bribes to meter readers, bypassing of meters, and incomplete revenue returns to Central Ministry of Energy and Water. The Asian Development Bank, in its May 2009 report on Fighting Corruption in Afghanistan cited examples of patronage for ministry jobs, consumer expectations of bribes to pay for utility services, and investor expectations of demands and bribes. For example, as many as 25 signatures are required ito secure an electricity connection in Kabul through the official procedures. But no signatures are required if you pay a bribe.
Other problems include an aging labour force and a shortage of young people entering the skilled labour, technical, and professional ranks.
Contractors have not performed well either, particularly the major US contractors, the Louis Berger Group and Black and Veatch. In fiscal year 2009, USAID had six active energy infrastructure projects underway, valued at an estimated $422.6m. All but one of these did not meet scheduled completion dates. Reasons for delays include poor contractor performance, poor contract oversight, and security concerns.
Security costs in particular have risen dramatically, from around 10 per cent of contract costs to around 30 per cent. Casualties have also been high, with the Louis Berger Group reporting, for example, 195 killed, 286 wounded, and 28 kidnapped over the last nine years in Afghanistan.
There are some small signs of hope, with the possibility of importing more energy from Uzbekistan and Tajikistan, but the chances of lights going on all over Afghanistan are not great. As of September 2009, the Afghan Energy Information Center estimates that approximately 15 percent of households in urban centers had access to electric power, whereas only six percent of rural households had access to electricity. Afghans mostly rely on electricity produced by costly diesel generators as opposed to lower cost options such as imported power or natural gas, hydro, solar, and wind energy.