By Alias Wardak-South Asia as an energy deficit region requires economic and feasible solutions in the energy sector, in order to secure a sustainable economic development. An effective approach to secure the required energy is the creation of a Regional Energy Market that connects the energy surplus countries of Central Asia and energy deficit countries of South Asia through Afghanistan. Regional energy projects such as CASA 1000, TUTAP and TAPI are the first steps towards to the realization of the Central Asia South Asia Regional Electricity Market(CASAREM). In order to guarantee a long-term and sustainable cooperation perspective, with provision of economic development and peace, it is necessary to establish a roof organization and develop the required cooperation frameworks.
This paper discusses the advantages of regional cooperation in the field of energy between Afghanistan, Pakistan and India for a sustainable economic development, peace and security from which not only these three countries but the entire region can take benefit.
According to the World Bank (2015) South Asia is one of the most populated regions (1.7 billion) in the world, with an average annual growth of population of more than 1.7 %. Although, one of the richest locations in regards to natural resources, with a GNI per capita of 1,496 USD (World Bank 2015), the region counts to the poorest in the world. Afghanistan, Bhutan, Nepal and Bangladesh are among the least developed countries (United Nations 2015) in the world.
Considering the population growth in the next decades, political instability due to insecurity which jeopardizes the entire region and extreme poverty (Modi et al. 2005),feasible and sustainable solutions for economic development that contributes to peace, political stability and poverty alleviation in the regionare urgently required.
Energy security plays a major role in the development of a sustainable economy. Currently, the SAARC countries suffer from energy deficit, which hampers the achievement of long-term objectives which could pave the way for prosperity, peace and development of the region.
This paper focuses on the importance of energy security for Pakistan, India and Afghanistan, as these countries play a major role in the realization of regional projects in the field of energy. In addition to economic factors, the political commitment of these three countries is impartial for the development and implementation of regional energy security from which all SAARC members can take benefit.
Current Status – Pakistan, India and Afghanistan
Pakistan has an installed capacity of 22,500 MW (available power 17,500 MW) and is highly dependent on fossil energy sources(Nawab 2013). The current annual deficit between demand and supply is 3 %. Pakistan’s peak demand is projected to more than 45,000 MW in year 2030. According to the World Bank, the gap between supply and demand has led to decrease of GDP by 2 % per annum(World Bank 2014). Considering the figures above, there is an urgent need for Pakistan to reduce the demand-supply-gap through development of domestic resources and regional energy programs.
Despite the fact, that India has improved the electricity connection rates and increased the domestic generation in the last decades, around 400 Mio. peoplestill do not have access to electricity and the energy deficit rate is more than 8 % (EnergyPedia 2015). According to Indian Experts during the last Afghan-Indian Renewable Energy Summit in New Delhi in August 2015, India requires 75,000 MW in the next five years in order to meet the demand. Especially, the huge dependency on fossil energy (> 70 %) is a critical factor that requires more cost effective solutions, in order to secure the growing economy of India.
According to the Ministry of Energy and Water, Afghanistan has huge potentials of renewable energy sources that can be viewed as maindevelopment pillar of the country towards self-reliance and sustainable economic development. Afghanistan can be an exporter of economic and eco-friendly energy to its SAARC partners. But up to date less than 2 % of the hydro, solar and wind resources are developed, which force the country to import more than 75 % of the energy from Central Asia and the Iran. The connection rate with 25 % is among the lowest in the region, in rural areas < 10 % of the population have access to electricity.
Considering the figures above, the need for joint efforts in the energy sector seems to be a necessity; in order to prevent scenarios that definitely would threaten the political stability, security and the asustainable economic development in the region.
CASAREM – An Opportunity for peace, prosperity and sustainable economic development?
CASAREM stands for the “Central Asia South AsiaRegional Electricity Market”, with the main objective to create a sustainable energy market through connecting the energy surplus Central Asian countries with the energy deficit South Asian countries.
The first phase has already started with the CASA-1000 project that will supply in total 1,300 MW from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan. Pakistan will receive 1,000 MW and Afghanistan 300 MW. Afghanistan will act as transit land, but will also provide Pakistan with the surplus power available during summer.
A second important project is the Turkmenistan-Uzbekistan- Tajikistan- Afghanistan-Pakistan interconnection (TUTAP) that is in the planning phase. Upon completion, the project will provide up to 1,000 MW (Neifer 2014) of power from thermal and hydro sources from Central Asia that will be transmitted through Afghanistan to Pakistan. Furthermore, the project will lead to a unified Afghan grid that contributes to a more efficient energy supply for Afghanistan and Pakistan.
The development of available hydro power resources in Afghanistan offers further opportunities to supply energy to South Asia. Pakistan will be the country that can take benefit the most from Afghanistan’s hydro potential.
Currently, two projects are under discussion:
Kunar hydropower plant (789 MW)
Joint-1,200 MW-Hydropower-Project between Afghanistan and Pakistan
Considering the relationship between the two countries, it would be of high importance to put continuous efforts on the realization of these projects. Especially, the Joint-1,200 MW- hydropower project on the KunarRiver has beside economic assets, also considerable trust building relevance that is not only important for this project but for the vision of CASAREM.
According to the Ministry of Finance of Afghanistan, a pre-feasibility study has been already completed. During the last negotiations in 2014, both governments agreed upon acceleration of the process. Unfortunately, almost no progress has been made since then. Therefore, it is of importance that both governments restart the negotiations as soon as possible, in order to realize this “trust-building”-bridge between Afghanistan and Pakistan. The chances that one of the major donors (World Bank, ADB or USAID) supports this project financially, will increase with visible results achieved through negotiations between the two countries.
The TAPI project where the construction works will be commenced very soon is a very good example which shows that implementation of mega regional projects are possible, if all countries commit themselves to support the process. However, experts are concerned about the security situation of some regions and the negotiated prices, the“BIG PICTURE” of this project promise a new era of regional cooperation that can pave the way for sustainable peace and prosperity in the region.
What should be the next steps for CASAREM?
The “SAARC Energy Framework Agreement for Energy Cooperation” signed in 2014 is a positive signal towards establishment of a long-term cooperation among the member countries, but we need more in order to create CASAREM. The SAARC member countries have already started cooperating with the Central Asian countries who are members of CAREC, but there is no institution that ensures the long-term cooperation between these two regions in Asia.
Therefore, it is recommended to establish a “Regional Energy Office” that coordinates the necessary steps and acts as facilitator for all involved partner countries. Considering Afghanistan’s geographical location as the linking point between Central Asia and South Asia, Kabul could be a suitable location for the office.
At the same time, the practical side of CASAREM should be accelerated through further regional projects. It is important that the current “ONE WAY” road of supply is changed into a “TWO WAY” road, where each country can see its benefits from the intended cooperation. The cooperation should be a “door opener” for Indian and also Pakistani goods and products export to Central Asia and through these countries, to Russia and even, in a later stage, to Europe.
Afghanistan’s huge energy generation capacity in the field of renewable energy and gas should be used as an additional source from which not only Pakistan but also the Central Asian countries can take advantage. The realization of ATGP (Ministry of Foreign Affairs Afghanistan 2015)would be a first positive sign, where Afghanistan will supply Tajikistan with surplus thermal energy available in the northern part of the country. Furthermore, the available revenues from the energy trade will support Afghanistan to build its infrastructure and commence with the extraction of its valuable natural resources in the mining sector, from which not only Afghanistan but the entire region can take benefit.
Considering the current economic situation of the SAARC countries, the growth of population and insecurity caused by insurgents groups, which jeopardizes not only the stability of a single country, but that of the entire region, regional cooperation is a necessity for the SAARC countries.
Energy as the motor for sustainable economic development can play a crucial role. Thus, the support of further regional energy programs and the establishment of a roof organization -Regional Energy Office- by the partner countries should be the next steps.
A pre-condition for the realization of CASAREM is the creation of trust between the countries, which should be based on mutual respect and honesty. The sovereignty and national interests of each country has to be considered within the cooperation framework, in order to ensure a long-term and sustainable cooperation between the partner countries.
An active participation of media, civil society and, of course, the private sector will definitely support the process of trust-building and will encourage also the political level to accelerate the realization of the CASAREM vision.
Alias Wardak is a Civil Engineer by profession and has diversified experience in the field of engineering and project management in Germany and Afghanistan with a special focus on energy. He is the Managing Director of INTEGRATION ES AFG Ltd. and Secretary General of “New Beginning” (NBN), an Afghan Professionals Network. He can be reached at: email@example.com