WSHPDR_2013_Final_Report-updated_version

Livelihoods and Energy Department, which was mainly
implementing the National Solidarity Programme’s
rural energy projects. After the set-up of the Energy
for Rural Development in Afghanistan (ERDA), the
department has been transformed into the Rural
Energy and Enterprise Department (REED). MRRD has
the mandate to plan and implement rural energy
supply at the village level.
Renewable energy offers great hope for Afghanistan,
especially for its rural electrification. Since the rural
population is dispersed, renewable energy offers the
best solution for electrification for the majority of
Afghanistan’s rural population. 9 However, at the
moment, there is no renewable energy policy in place
yet. The ICE appointed a sub-committee that was
being advised in technical and administrative terms by
the German Agency for Technical Cooperation’s
Energy Programme in Afghanistan. A draft version of
‘Afghanistan Rural Renewable Energy Strategy Action
Plan until 2014 and Development Objectives until
2020’ was finalized in September 2010.
Solar power is another option as Afghanistan is a
country with one of the highest irradiation values on
earth. Solar photovoltaic (PV) can be the most
economic for small loads, such as lighting in the
absence of a connection to the main power grid
and/or mini grid. A solar home system to provide
basic lighting may cost up to US$7,000 per kW,
whereas a micro hydropower station, which can
supply household and productive uses may only have
investment costs around US$3,000 per kW. However,
construction time and investment costs are also
factors to consider.
The Afghanistan National Rural Renewable Energy
Strategy (2010) focuses on economic development in
rural areas through the provision of high quality
electricity based on renewable energy technologies,
including micro hydropower. It aims to be less of a
master plan, and more of an adaptable work plan. It
foresees increasing energy needs and possible
insufficient electricity production from PV systems or
isolated wind operations and suggests the use of base
load power plants such as mini hydropower to
improve the energy access situation in rural zones of
the country.
Legislation on small hydropower
The National Rural Energy Strategy (2010) includes an
Action plan until 2014, with the following actions:
Training the private sector (hydropower turbine
manufacturers, operators and hydropower
engineering companies) on the delivery of high
quality energy services in rural areas.
Creating guidelines for operation and
maintenance (O&M) of small hydropower plants
(more than one MW) and basic electrification
schemes (below 100 kW). 8
Adapting international standards in rural
renewable energy to Afghan National Standards
via the Afghan National Standards Authority.
Barriers to small hydropower development
Barriers to small hydropower in Afghanistan should be
seen in the wider context of barriers to rural
renewable energy expansion, since micro to small
hydropower is mostly used in rural areas:
Weakness of the private sector for investment in
rural energy, despite an increase in companies
and entrepreneurs in the last years.
Lack of important data for Afghanistan. For
example, figures like the total number of urban
households, total number of non-residential
establishments, and total number of rural
households, as well as total cost of power import,
generation, transmission, distribution, operation,
maintenance and administration for the entire
country, were not available in 2007. 4 The demand
for data such as the total actual electricity
generation and the electricity generated based on
renewable energy was reiterated in the National
Rural Renewable Energy Strategy (2010) under
objectives and indicators until 2020.
Lack of involvement of international financial
institutions with regard to support to the private
sector in this area. 9
Lack of concessionary loans (with sovereign
guarantees) provided for rural electrification
projects and major organizations with
international involvement in infrastructure
development, environmental protection and
support for private sector development.
Deficits in cash-flow: The Draft Electricity Law
includes the agreed principle that the main
instrument for financing operation and
maintenance (including mini repairs of key
components) should be cash-flow finance. Retail
tariffs for electricity supply need to cover all O&M
costs, but in reality, consumers are either
unwilling or unable to pay for the full cost of
supply, resulting in cash-flow deficits, and often a
critical financial position of the utility or operator
of an isolated mini-grid. 8
Instability in the country, that has been
mentioned as a constraint to the timely
implementation of the Power Sector Strategy in
some places. 8
Limited technical human resources capacity (i.e.
not enough trained personnel able to produce
improved units from standard technical
drawings). 10
Licensing requirements: The draft Rural
Renewable Energy Strategy requires operators of
isolated mini-grids to be licensed, while
considering affordability and financial
requirements of the licensee, and the costs of
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