Large infrastructure projects in challenging environments require significant time and investment, but Badakhshon Energy’s (BE) estimated $631 million project costs are considerably lower than any other comparable projects in Afghanistan. The Company will be investing in new, large-scale energy generation, transmission and distribution infrastructure; repairing and improving existing infrastructure; and building out comprehensive business processes. The amount of the investment is what is needed to bring clean, reliable and affordable electricity to all households in Badakhshan including the most remote communities and ensure the Province’s energy supply will be fully self-sufficient and will not have to rely on importing energy from other countries and/or provinces. 

Firstly, the project includes investing in at least 91 megawatts (MW) of electricity generation capacity at an anticipated cost of $364m ($4m/MW). This is below the average per MW cost for similar-sized projects according to the International Renewable Energy Agency (IRENA). BE is also able to effectively leverage the Aga Khan Fund for Economic Development’s (AKFED) experience with similar projects in remote, rural regions to further reduce costs. This experience includes the construction and implementation of the 11MW Sebzor Hydropower Plant (HPP) in Tajikistan at the cost of $4.4m/MW; and, the completion and implementation of the Shurobak HPP in Badakhshan at the cost of ~$6.5m/MW. 

Secondly, the project includes the rehabilitation of existing HPPs across Badakhshan including those in remote communities that cannot be connected to the main transmission network that BE will be installing. These small-scale plants, particularly those in remote and hazardous locations will have high implementation costs to improve their resilience and ensure they able to meet the energy needs of the communities for the next 50 years. 

Finally, the project includes the installation of a provincial energy network for the distribution of all electricity produced by BE. Installing this network involves the construction of thousands of kilometers of new power lines across Badakhshan to ensure all households have access to BE’s reliable electricity supply. 

The implementation costs will be covered by AKFED and a variety of development partners. This model will enable BE to create a tariff structure that prioritizes affordability for all residents of Badakhshan. The Government of the Islamic Republic of Afghanistan will not be required to commit any funds but will assist BE in channeling financing from development partners.