Afghanistan signs $160 million renewable energy deal with US, Turkey and India

110 megawatts will be added to the country's grid. (Shutterstock)
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Updated 24 September 2020

Afghanistan signs $160 million renewable energy deal with US, Turkey and India

  • Solar and wind power projects will be developed in Kabul, Balkh and Herat provinces
  • Afghanistan imports 1,200 megawatts of energy from Iran, Tajikistan, Uzbekistan and Turkmenistan

KABUL: Solar photovoltaic and wind power projects signed by Afghanistan under a $160 million international deal on Wednesday evening will add 110 megawatts to the country’s grid in the next 16 months, officials said.

The projects will be developed in Kabul, Balkh and Herat by a local company with partners from Turkey, India and the US Agency for International Development (USAID).

“With the implementation of these projects, we will not only witness improvement in the energy sector, but (in other areas) as energy is the basic need for the improvement of other sectors,” Lima Khoram, policy and development chief at the Afghan Finance Ministry, told Arab News on Thursday.

“We will also see the development of other major sectors. This is not only good news for the citizens, but for all investors and entrepreneurs too,” she said.

Afghanistan needs to increase access to energy to enable development — and the projects signed on Wednesday are going to be the country’s biggest investment in solar power so far, according to Wahidullah Tawhidi, a spokesman for DABS, the country’s main power producer.

“This will be a highly efficient work for the generating of more electricity in Afghanistan,” he said.

Tawhidi told Arab News that the projects will be developed in partnership with USAID by an Afghan company, a firm from Turkey, and one from India.

One of the projects, a photovoltaic station designed to produce 40 megawatts of power, will be built in the northern Balkh province, which is the main gateway to Central Asia.

Two plants — one solar and one wind powered with a capacity of 25 megawatts each — will be installed in western Herat province, near the border with Iran Turkmenistan.

The fourth one, a floating solar power station, will be built at Naghlu dam, east of Kabul.

Afghanistan currently imports 1,200 megawatts of energy from Iran, Tajikistan, Uzbekistan and Turkmenistan as it can only generate 400 megawatts from its dams.

The country, whose infrastructure has been destroyed by decades of conflict, requires 7,500 megawatts for its nearly 33 million population to have access to electricity.

The lack of security in recent years caused many businesses to flee Afghanistan so the renewable energy agreement is expected to encourage more foreign investment.

Talha Hidayat, director general for public-private partnership at the Finance Ministry, said that 16 projects worth $3.1 billion, which include two power dams and involve the agricultural and telecommunications sectors, were ready for investment.

“Feasibility studies are finalized. We will announce it for open competition. Currently nine national and international firms have shown interest,” he said.
 


‘The stock market, stupid’ — Trump’s claim is looking hollow 

Updated 29 October 2020

‘The stock market, stupid’ — Trump’s claim is looking hollow 

  • The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency
  • The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost

Before the US election of 1992, candidate Bill Clinton summed up what he saw as the reason he would become president: “It’s the economy, stupid.” He was proved right as voters disowned the economic policies of President George H.W. Bush in their droves to elect Clinton. 

Until the COVID-19 pandemic began to ravage the US economy in March, President Donald Trump would have been able to make the same claim. For the four years of his presidency, the US economy had continued the progress initiated by his predecessor to recover from the 2009 global financial crisis.

By most measures — growth, employment, inflation — the Trump years had been good, and those on the top of the pile had even more reason to be grateful thanks to the big tax cuts he had made a flagship policy.

The pandemic changed all that in the space of a few weeks as lockdown measures shocked the economy. Jobless claims soared to all-time records, bankruptcies and closures affected large swathes of American business, and gross domestic product collapsed. The International Monetary Fund forecasts that the American economy will shrink by 4.3 percent this year.

But Trump could still claim instead that “it’s the stock market, stupid” as a reason he could be re-elected. Mainly because of the trillions of dollars injected into the economy in the form of fiscal stimulus, US share indices had swum against the economic tide.

The S&P 500 index hit an all-time high in September, allowing Trump to boast that under his administration, investors and the millions of people whose livelihoods depended on the financial industry had never had it so good.

Now, it looks as though even that final claim is looking more fragile. For the past couple of days, US and European stock markets have gone into reverse as investors took fright at the rising number of COVID-19 cases and the re-imposition of economic lockdowns in many countries.

Trump might argue, with a little justification, that Wall Street is worried about the prospect of Joe Biden being elected president by the end of next week. Certainly the contender, by definition, is something of an unknown quantity in terms of economic policy.

He is also known to favor some policies — such as tighter regulation on environmental sectors, more spending on health care, and higher taxes for federal services and projects — that have traditionally been regarded as contrary to the philosophy of “free market” America.

In particular, the energy industry is worried about possible restrictions on shale oil and gas production that Biden and his “green” team are believed to favor. However, it should be pointed out that the Democratic candidate has specifically said he will not ban shale fracking, as some environmentalists want.

In any interesting side-story, the state of Texas — one of the biggest in terms of electoral college votes — would seem to have more to lose than any other if the energy scare stories about Biden were true. Yet the contest there between Democrats and Republicans is the closest it has been for decades, according to opinion polls.

The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency and a sign of his deal-doing prowess. If even this claim is denied to him in the final week of campaigning, it would make the uphill battle against the polls even more difficult.

There is a chance that Big Tech might offer some relief. The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost, given that they were the ones largely responsible for the big market gains earlier in the year.

But for Trump, any such respite might be too little, too late. It looks as though Wall Street and Main Street are finally catching up in their gloom, and there is nothing the president can do about it.