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Electricity: A Serious Issue for the Afghan Economy

By Kai Pflug

If you frequently communicate with friends and colleagues based in Afghanistan, you will soon notice that remaining in contact online is sometimes difficult. Usually, the issue is a lack of electricity on the Afghan side, particularly in winter.

While not being able to have a Zoom call with an Afghan friend is inconvenient, for that friend the problem often is much bigger. If he or she needs internet access to work, it will mean the opportunity to work effectively will not be available for long stretches – usually hours, sometimes days – on end. And of course, nowadays many white-collar tasks are very difficult to do without online access. So, the lack of electricity represents a real drain on the Afghan economy.

In other areas, this may be even more obvious. For example, in an article on Salam Watandar of September 2023, the owner of a steel mill in Kabul states that due to lack of electricity, the production volume of his factory has been reduced by half. At another Kabul steel mill, 150 of its 500 workers had to be laid off despite high demand for its steel as production hours are limited by the availability of electricity (source). Similarly, a manager of a soft drink producer explains that the high electricity prices caused by the necessary use of their own generator have had a very negative impact on the company’s profit.

The extent of the damage to the Afghan economy becomes clear in a statement by officials of the Union of Afghan Industrialists stating that Kabul factory production in July and August 2023 declined by 40% due to the lack of electricity.

An Aljazeera article also points out that the lack of electricity limits the development of Afghan agriculture – better mechanization of the sector would make it more productive. Overall, the head of the Afghanistan Chamber of Industry and Mines (estimates that an additional supply of electricity from Turkmenistan alone could boost agricultural and industrial production by $2bn.

Officials acknowledge the problem and are working on solutions, such as a 500-kV power line from Turkmenistan cited above and an increase in solar power, but admit that solving the problem will take time. They have also asked Iran to reduce electricity tariffs and prevent power supply cuts to Afghanistan, a step that would allow for a shorter-term improvement in Afghanistan’s electricity supply.

Originally posted 2024-03-16 18:06:00.