Business
Ministry of energy pushes ahead with plans to increase power output
Officials from Afghanistan’s Ministry of Energy and Water have identified 16 electricity-generating projects that once established will increase power output and help make the country less reliant on its neighbors for this critical commodity.
The ministry’s spokesman Mawlavi Akhtar Mohammad Nasrat said of these 16, there are 12 thermal and solar power projects that have been identified and proposals have been shared with domestic and foreign investors in the hope of attracting financial backing.
Nasrat told Ariana News they have spoken to possible investors from Russia, Iran, the US, China and Turkey but as yet no agreements have yet been finalized.
“Companies and donors came here to Afghanistan from Russia, US, China, Iran, and Turkey and said they are interested in investing in this area to increase electricity generation across the country,” he said.
Economists also believe that if investors can be found to support this sector, and more electricity is generated, industry will grow.
One economist, Taj Mohammad Talash, said he thinks the agricultural sector would also grow if more power was generated. He said: “The Islamic Emirate can prioritize energy in three categories, through water, wind, and solar.”
Currently, Afghanistan pays its neighboring countries about $250 million a year for electricity as it generates only about 600 megawatts (MW) from several hydroelectric, fossil fuel and solar plants.
However, an additional 670 MW is imported from neighboring Iran, Uzbekistan, Tajikistan and Turkmenistan.
Power projects ‘prioritized’
In April, the IEA’s Economic Commission, chaired by Deputy Prime Minister Mullah Abdul Ghani Baradar, gave orders for various ministries to prioritize projects to generate electricity.
At the time, the commission said after “extensive discussions on all issues that the private sector is prepared to invest in” it was decided that the generation of electricity should be a priority.
According to the statement, the commission instructed the Ministry of Mines and Petroleum; the Ministry of Trade and Industry; the Chamber of Industry and Mines; as well as the Chamber of Commerce and Investment, under the leadership of the Ministry of Energy and Water, to also generate electricity from coal.
A shortage of power has plagued Afghanistan for decades despite it having ample hydropower, coal and fossil fuel resources.
Over the past few years however, one successful private partnership has emerged – between the Afghan government and Bayat Power, Afghanistan’s largest, Afghan-owned and operated power production company which has the region’s most technologically advanced gas fired electric power plant.
Launched in 2019, this commercial operation provides reliable and affordable electric power to thousands of people in Afghanistan.
Located in Sherberghan, in the north of the country, the epicenter of the nation’s gas-rich region, Bayat Power has steadfastly aimed to provide essential power for Afghanistan’s economic growth.
Powered by a Siemens SGT-A45 ‘Fast Power’ turbine, the world’s most advanced mobile gas to energy power solution, phase one of Bayat Power-1’s operations generates up to 41 megawatts of power for Afghan homes and businesses.
To date, Bayat Power has delivered over 600 million kilowatts of domestic power to the Afghan grid. However, Bayat Power hopes to eventually roll out three phases in total, that will generate more than 200 megawatts of electricity – enough to serve millions of Afghan residential and commercial clients.
Business
Ministry of commerce allocates land for oil refineries
Acting Minister of Industry and Commerce Nooruddin Azizi, said in a meeting with oil refinery officials that as soon as they are ready to invest, the ministry will establish an oil and gas industrial park.
In this meeting, refinery officials discussed problems regarding the Qashqari oil field and agreed that land should be provided. They said oil extracted from Qashqari needed to be refined through the standard process.
Azizi, while announcing the cooperation and support of the Islamic Emirate and especially the Ministry of Commerce and Industry for the private sector of the country, said: “A joint proposal should be arranged and submitted to this ministry for the land of the refineries, and also if the officials of the refineries are ready to invest in the area of Dara-e-Hairatan, an oil and gas industrial park will be created and the land will be placed under their control.”
Azizi emphasized the need to increase the capacity of existing refineries and the quality of oil, shared the decision of the High Economic Commission regarding the establishment of a large refinery.
Business
Pakistan’s Federal Secretary of Commerce invited to visit Kabul
Acting Minister of Industry and Commerce, Nooruddin Azizi, has invited Pakistan’s Federal Secretary of Commerce Mohammad Khurram Agha to visit Kabul.
In a virtual meeting, the two sides discussed the progress made in the last two and a half years in the country, the increase in trade between the two countries, solving problems and removing trade and transit barriers.
They also discussed the need for more facilities, establishing close relations between the governments and private sectors of the two countries and boosting regional cooperation, the Ministry of Industry and Commerce said in a statement Monday.
Business
Headline inflation in Afghanistan down to -10.2% in January: World Bank
In January 2024, headline inflation experienced a significant downturn, reaching -10.2 percent on a year-on-year basis, the World Bank said in a report.
This substantial drop was largely due to a sharp decline in prices across both food and non-food categories, the report said.
Moreover, core inflation, which strips out the typically volatile food and energy sectors, also fell into negative territory, posting a rate of -6.5 percent on year-on-year basis.
“This ongoing core deflation reflects a troubling inability of both private and public sectors to stimulate sufficient demand. While this period of falling prices may offer temporary financial relief to the most vulnerable households by reducing the cost of living, it can also harm the broader macroeconomy,” the World Bank said.
According to the bank, Afghanistan’s exports contracted by 5 percent on year-on-year basis to $140.5 million in January 2024, down from $148.1 million the previous January.
Food exports to India jumped by 22 percent, compared to an 18 percent decline in Pakistan. Pakistan and India continued to be the top export destinations, claiming 45 percent and 34 percent of the total exports in January 2024, respectively.
The 2023 growth trend in imports extended into January 2024, hitting $830 million, up 37 percent from $600 million in January 2023.
According to the report, in 2023, the afghani (AFN) saw a significant 27 percent appreciation against the US dollar, buoyed by the influx of around $1.8 billion in UN cash shipments and an estimated $2 billion in remittances.
Revenues have been below the Islamic Emirate of Afghanistan’s (IEA) target during the first eleven months of FY2024, with border taxes underperforming despite a surge in imports.
Over the eleven-month span of FY2024, from March 22, 2023, to February 21, 2024, Afghanistan’s revenue collection reached AFN 189 billion, narrowly missing the target by 2 percent but marking a 5.6 percent increase from the previous fiscal year, the report said.
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