Central Asian power export project in doubt after ADB pulls funding

By bne IntelliNews June 10, 2013

bne -

The future of the CASA-1000 electricity transmission project has been cast into doubt on news that the Asian Development Bank (ADB) is quitting the project over concerns about the security situation in Afghanistan.

ADB was one of the main supporters of CASA-1000, a project to export electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan through a high capacity transmission line. The bank had been expected to put up around 40% of the project cost, which is estimated at $950-$970m.

Citing a Pakistani government official, the Express Tribune reports that ADB is now dropping its plans to support the project because of concerns over security risks in Afghanistan. Pakistan would have been the main recipient of surplus electricity from Kyrgyzstan and Tajikistan, with Afghanistan expected to consume 300MW a year, and Pakistan 1,000MW.

Both the Russian and the US governments also planned to back the project. Moscow has announced that Russian energy companies may provide up to $500m of the cost, with the World Bank and Inter-American Development Bank also expected to provide funding.

In February, Kyrgyzstan's Deputy Energy Minister Aibek Kaliyev announced that work on the project was due to start in 2014, adding that Bishkek expects to raise 60% of the $197-200m required for its section of the project from international financial institutions.

ADB's decision to back out of CASA-1000 also raises questions about the planned Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, which also depends on a secure and stable Afghanistan. Along with the four participating governments, the ADB was the main supporter of TAPI.

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