The Asian Development Bank (ADB) has signed a $4 million loan with a unique purpose vehicle and subsidiaries owned by the 77 Construction, Contracting, and Trading Group (77 Group), an international civil works contracting firm headquartered in Turkey, to simply help build a 15.1 megawatt (MW) solar energy plant and promote the development of renewable energy in Afghanistan.
The borrower is Barakat Kandahar Solar Energy (BKSE), a unique purpose vehicle majority owned by 77 Afghanistan, a subsidiary of 77 Group. The co-borrowers include three subsidiaries of 77 Group. The agreement was signed by Principal Investment Specialist at ADB’s Private Sector Operations Department Ms. Sonali Tang, and Chairman, BKSE, and owner of 77 Group Mr. Suleyman Ciliv.
“Having a stable, sustainable, and reliable energy source is important for the growth and development prospects of Afghanistan, where power generation and access is one of the lowest in the world,” said Senior Public–Private Partnership specialist at ADB’s Office of Public–Private Partnerships Mr. Mohammed Azim Hashimi. “ADB’s support for this important project will help provide long-term financing that is not available locally to build and operate a state-of-the-art solar power plant in Afghanistan.”
“77 Group would like to thank ADB for paving the way for investors in Afghanistan by supporting the first private sector-financed independent power producer ,” said 77 Group representative and project director Mr. Burak Unsal. “77 Group is keen to work with ADB on future renewable energy investment projects.’’
Afghanistan ranks in the bottom 5% with regards to per capita electricity usage, with only 30% of the country’s population linked to the grid in 2015. In terms of energy mix, solar powered energy accounts for just about 1% or 3 MW of the country’s total installed generation capacity. This really is despite Afghanistan having about 220,000 MW of solar powered energy generation potential. The Government of Afghanistan aims to produce the country’s renewable energy generation, including solar powered energy, so it may contribute at the least 5,000 MW (40% share) to the national grid by 2032.
The Kandahar Solar Power Project will use a 15.1 MW solar photovoltaic power plant and related facilities, increasing the method of getting clean capacity to the domestic grid in Afghanistan. The energy plant will generate about 27.5 gigawatt-hours of electricity annually and avoid 8,500 a great deal of carbon dioxide emissions. It may also help lift the share of renewable energy in the country’s total installed power generation capacity to between 4,500 MW and 5,000 MW by 2032.
ADB will also administer a $3.85 million loan from the Canadian Climate Fund for Private Sector in Asia II (CFPS II) for the project. CFPS II was established in March 2017 to support greater private sector participation in climate change mitigation and adaptation in low and lower middle-income countries in Asia and the Pacific.