CPC - Caspian Policy Center


afghanistan struggles to pay electricity bill with taliban in charge

Afghanistan Struggles to Pay Electricity Bill with Taliban in Charge

Author:Dante Schulz

Oct 22, 2021

Image source: Felipe Dana/ AP in the Wall Street Journal

The resurgence of the Taliban in Afghanistan foreshadows a dark winter for millions of Afghans who rely on electricity imports from neighboring Central Asian countries. According to a recent Bloomberg report, Afghanistan imports 78 percent of its electricity needs to meet current demands, of which 57 percent, 17 percent, and 4 percent originate in Uzbekistan, Turkmenistan, and Tajikistan respectively. However, in August 2021, the United States froze $9.5 billion of the Afghan Central Bank’s assets to prevent the Taliban from acquiring these funds. Other governments and the international financial institutions took similar steps. Furthermore, shipments of cash to Afghanistan were halted, sending the country’s economy spiraling into a state of unknown and incapable of paying for imported electricity. The situation in Afghanistan could quickly turn dire when millions in the country will be left without stable electricity in frigid winter temperatures.

Prior to the Taliban takeover, Afghans were already enduring long winters with chronic power shortages. Residences across Kabul reported nights with no running water or electricity in below freezing temperatures. In addition, individual gas generators used to power businesses contributed to the thick cloud of pollution above the city. In February 2012, Kabul recorded its lowest temperatures and heaviest snowfalls in 15 years, crippling the city’s infrastructure and precipitating a spike in gas and wood prices. Afghanistan’s electricity infrastructure failing in its capital city under President Hamid Karzai’s administration suggests that an even darker winter could be approaching for Afghanistan’s residents now that the Taliban has assumed control.

Afghanistan heavily depends on its Central Asian neighbors to deliver electricity to its borders. Afghan state-owned electric utility company Da Afghanistan Breshna Sherkat (DABS) paid Uzbekistan $100 million annually to receive a steady supply of electricity. The two countries solidified this agreement with a 10-year electricity supply contract in 2020. The Taliban takeover does not appear to have disrupted much of Uzbekistan’s exports to the country. Uzbekistan’s Foreign Minister Abdulaziz Kamilov traveled to Kabul on October 7 to meet with the Taliban delegation. In Kabul, the foreign minister discussed plans to construct the Surkhan-Puli-Khumri power transmission line to increase Uzbek electricity exports to Afghanistan by 70 percent.

Even so, neighboring Tajikistan and Uzbekistan already struggle to supply sufficient electricity domestically. In January 2021, Uzbek President Shavkat Mirziyoyev cut natural gas exports to help meet heightened domestic demands, but also affecting Afghan electricity supplies. Similarly, during the summer of 2020, Tajikistan slashed electricity exports to Afghanistan from 450 MW to 40 MW due to a reduction in water levels. Additionally, Tajikistan has remained steadfast in its opposition to the Taliban. A Taliban-led regime in Afghanistan could cause Tajikistan to reduce or outright terminate electricity exports to Afghanistan.

At the moment, Kabul is enjoying uninterrupted supplies of electricity because Taliban has stopped tampering with transmission lines from Central Asia. Nevertheless, the Taliban does not possess the sufficient funds to repay Afghanistan’s neighbors for the electricity. DABS has only $40 million reserved in its accounts but the Taliban has yet to approve its request to appropriate these funds towards repayment. Meanwhile, its liabilities have continued to grow, amounting to more than $90 million. Furthermore, DABS faces the reality that customers across Afghanistan, in addition to lack of access to funds, have also lost their jobs following the Taliban’s takeover.

Afghanistan faces a perilous situation. Unreliable electricity supplies could leave millions without heat and running water throughout the winter. In addition, infrastructure projects to procure a national power grid for Afghanistan and bolster its electricity supplies will slow or even stop due to the lack of Western financing and support. The effects of unstable relations between Afghanistan and its Central Asian neighbors to supply the bulk of its electricity can mean reduced power in the upcoming winter months with ramifications for the situation within Afghanistan as well as for relations with the Taliban authorities.

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