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World Bank agrees to restart Afghanistan CASA-1000 power project

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The World Bank has announced that it has agreed to restart the Central Asia-South Asia Electricity Transmission and Trade Project (CASA-1000) in Afghanistan amid concerns among the other participating countries -Kyrgyzstan, Tajikistan and Pakistan – that they risk $1billion of stranded assets.

However, the WB said the resumption would only take place within a ring-fenced structure that would ensure all construction payments and future revenue are managed outside of Afghanistan and do not involve the Islamic Emirate government.

The structure would also mean a strengthened commitment to the use of international consultants to supervise progress and third-party monitoring to verify progress and certify contractor invoices, it said.

The $1.2bn CASA-1000 regional power project is designed to interconnect the power grids of the four participating countries, allowing for hydro power-generated electricity to be exported from the two Central Asian states to Afghanistan and to Pakistan via Afghanistan.

The project was approved by the World Bank board in March 2014 with financing from the International Development Association (IDA), but in Afghanistan it was paused, with all implementation activities stopped, in the wake of the return to power of the Islamic Emirate.

Before the project was paused, about 18% of the towers for the Afghanistan portion of the CASA transmission line had been erected and about 95% of the materials and equipment needed to complete the project in the country had been supplied, according to the World Bank.

Despite the Afghanistan pause, the Kyrgyz Republic, Tajikistan and Pakistan continued with the implementation of CASA-1000 and construction activities are nearly complete in all three countries, it added.

The ring-fenced resumption, said the World Bank, would be in two phases: construction, expected to take three years, and operations after that.

Its statement concluded: “During the project construction phase, the World Bank will make payments directly to the offshore accounts of international contractors and consultants, based on verification of invoices by the independent monitoring agency.

“For the operations phase, Offshore Account Bank (Abu Dhabi) arrangements are in place to ensure that payments and revenue are ring-fenced offshore as per commercial contractual agreements with requirements for no objection for use for specified purposes, including purchase of electricity from Tajikistan and Kyrgyz Republic under the CASA-1000 and other existing power purchase agreements.”

The IEA has repeatedly called for the resumption of stalled development projects in the country by international organizations and countries.

The Islamic Emirate of Afghanistan (IEA) says that, any project that is implemented in Afghanistan should be done once the Islamic Emirate of Afghanistan has been informed.

The IEA also said Afghanistan’s conditions should be taken into consideration.

“We are ready to cooperate. There is security in Afghanistan and there are facilities to implement the project and the system cooperates in the necessary sectors and will not be an obstacle,” said Zabiullah Mujahid, IEA’s spokesman.

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Uzbekistan approves feasibility study agreement for Trans-Afghan Railway

The agreement builds on a tripartite document signed on July 17, 2025, which outlined cooperation on preparing a feasibility study for the Termez–Kharlachi railway corridor.

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Uzbekistan has ratified an international agreement to prepare a feasibility study for the Naybabad–Kharlachi section of the Trans-Afghan Railway, formalizing its participation in the project.

President Shavkat Mirziyoyev signed a decree on February 4 approving the agreement.

The framework agreement involves the transport ministries of Uzbekistan, Afghanistan and Pakistan and provides for joint work on a feasibility study for the proposed railway line between Naybabad and Kharlachi. The section forms part of the wider Trans-Afghan Railway project aimed at strengthening transport links between Central and South Asia.

Under the decree, Uzbekistan’s Ministry of Transport has been designated as the competent authority responsible for implementing the agreement. The Ministry of Foreign Affairs has been tasked with notifying Kabul and Islamabad that Uzbekistan has completed the internal procedures required for the agreement to enter into force.

The agreement builds on a tripartite document signed on July 17, 2025, which outlined cooperation on preparing a feasibility study for the Termez–Kharlachi railway corridor.

The planned route is expected to run through Termez, Naybabad, Maidanshahr, Logar and Kharlachi, providing a transit corridor through Afghanistan.

The feasibility study will be commissioned by the Tripartite Project Office for the Development Strategy of International Transport Corridors under Uzbekistan Railways.

Established in Tashkent in May 2023, the office also operates branches in Kabul and Islamabad to coordinate the project.

First proposed in 2018, the Trans-Afghan Railway was initially projected to carry up to 20 million tons of cargo annually at a cost of about $5 billion. Cost estimates have since been revised.

In July 2022, Uzbekistan Railways cited an estimate of $4.6 billion with a construction period of up to five years, while Pakistan’s Ministry of Railways put the cost at $8.2 billion in December 2024.

More recent assessments have placed the overall cost at around $7 billion, with a public-private partnership under a Build-Operate-Transfer model among the options under consideration.

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Afghanistan seeks expanded ties with Russia in energy, mining and infrastructure

TASS reported that Kabul is also prepared to cooperate with Moscow in the extraction of mineral resources.

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Afghanistan has expressed strong interest in broadening trade and economic cooperation with Russia, with a particular focus on energy, mining and infrastructure projects, according to Russia’s TASS news agency.

In an interview with TASS, Afghanistan’s Ambassador to Moscow, Gul Hassan, said Kabul is keen to import oil and gas from Russia as part of efforts to deepen bilateral economic ties.

He noted that trade relations between the two countries are progressing and that, if key obstacles—especially banking restrictions—are addressed, Afghanistan could also import medicines, industrial goods, grain, vegetable oils and other commodities from Russia.

In return, the ambassador said Afghanistan is ready to export fresh and dried fruits, vegetables, medicinal plants, carpets and mineral resources to the Russian market, adding that expanding export-import operations could significantly increase bilateral trade volumes.

He also revealed plans to open an exhibition of Afghan products in Moscow, which he said would help boost trade turnover.

TASS reported that Kabul is also prepared to cooperate with Moscow in the extraction of mineral resources.

Hassan described the economy as a central pillar of Afghanistan’s foreign policy, emphasizing the government’s goal of positioning the country as a key link in regional economic integration and attracting foreign investment.

He noted that Russian companies have long shown interest in Afghanistan’s industrial, mining and infrastructure sectors.

The ambassador further told TASS that Russian firms are already in talks with relevant Afghan authorities on the construction of small hydroelectric power plants.

Representatives of several Russian companies have reportedly visited Afghanistan and held meetings with officials and technical experts.

According to Hassan, practical steps toward cooperation in the energy and power generation sectors are expected in the near future, pointing to a potential new phase in Afghan-Russian economic relations.

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Pakistan, China plan to extend CPEC to Afghanistan, revive trilateral framework

The proposed CPEC expansion into Afghanistan is seen as a move to enhance regional economic integration amid shifting geopolitical dynamics.

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Pakistan and China are moving forward with plans to extend the China-Pakistan Economic Corridor (CPEC) into Afghanistan, a strategic step aimed at bolstering regional connectivity and economic cooperation. The expansion, along with the revival of the Pakistan-China-Afghanistan trilateral framework, was discussed in a recent briefing to the Pakistani Senate Standing Committee on Foreign Affairs.

According to Pakistan Today, officials from Pakistan’s Ministry of Foreign Affairs outlined the details during a session in Islamabad, where they reviewed key aspects of Pakistan’s foreign relations, regional developments, and economic diplomacy.

Officials emphasized that Pakistan’s relationship with China remains strong, underscoring the “all-weather” strategic partnership between the two nations. Strengthening ties with Beijing, they stated, continues to be a cornerstone of Pakistan’s foreign policy. This includes unwavering support for China’s position on regional and international issues, particularly the One-China policy and matters related to territorial integrity.

The briefing also touched upon China’s consistent backing of Pakistan in various areas, including sovereignty, economic stability, counter-terrorism, and support for Pakistan’s exit from the Financial Action Task Force (FATF) grey list.

The Kashmir issue was also addressed, with officials noting that China considers it an unresolved matter and advocates for a peaceful resolution in line with UN Security Council resolutions.

The proposed CPEC expansion into Afghanistan is seen as a move to enhance regional economic integration amid shifting geopolitical dynamics. Officials stated that reviving the trilateral framework is part of broader efforts to foster greater cooperation and connectivity in the region, with an eye on long-term stability and prosperity.

The move also reflects both countries’ desire to further integrate Afghanistan into the regional economic landscape, a key element in fostering peace and development.

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