Afghanistan Utility Breaks Ground on Landmark Infrastructure Project

Afghanistan Utility Breaks Ground on Landmark Infrastructure Project
Afghanistan Utility Breaks Ground on Landmark Infrastructure Project

For Immediate Release

Sunday, September 24, 2017

Kandahar, Afghanistan - A 10-megawatt solar power plant, the first of its capacity in Afghanistan, is now under construction near the city of Kandahar after a ceremonial groundbreaking event featuring government officials and representatives of the country's national utility Da Afghanistan Breshna Sherkat (DABS) and the Indian company contracted to build and operate the site. The project was made possible by $10 million in incentive funds provided by the U.S. Agency for International Development to mitigate the risk to the contractor, Dynasty Oil & Gas, Ltd.

DABS negotiated a 15-year Power Purchase Agreement with Dynasty under which the firm is committed to sell power to DABS to increase the power supply in a volatile region where demand for energy far outstrips available resources.

DABS used an innovative reverse auction to solicit bids for the contract and hold down project costs. Qualified bidders were invited to participate in the online auction, held on July 16, 2016. The bidders were required to submit bids at a starting price established by DABS, and the lowest bid won the contract.

“This privately-owned and maintained solar power plant will be an important step toward solving the critical shortage of power in Kandahar,” DABS CEO Amanullah Ghalib said. “It will provide electricity to an industrial park, thus enabling additional private sector investment in the area,” he added.

Acting USAID/Afghanistan Mission Director Michael McCord said the private sector is the key to further development of Afghanistan’s energy sector.

“We are encouraging many more private/public investment agreements in Afghanistan, which will lead to more economic growth, security and prosperity for the Afghan people,” McCord said.

With almost $17 billion spent on development programs in Afghanistan since 2002, USAID provides the largest bilateral civilian assistance program to Afghanistan. USAID partners with the government and people of Afghanistan to ensure economic growth led by the country’s private sector, to establish a democratic and capable state governed by the rule of law, and to provide basic health and education services for all Afghans.

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