The recent signing of a memorandum of understanding among Tajikistan, Kyrgyzstan, Afghanistan and Pakistan heralds a potentially significant expansion in energy cooperation in Central and South Asia. Significant obstacles remain in the way of closer cooperation, however.
The memorandum, signed October 30 in the Tajik capital Dushanbe, envisions the delivery of Tajik and Kyrgyz electricity to Pakistan via Afghanistan. Without delving into details, the MOU indicated that Pakistan would import about 1,000 megawatts of electricity from Central Asia.
Over the past year, US diplomats have pushed for the rapid development of Central-South Asian energy links. [For background see the Eurasia Insight archive]. US Secretary of State Condoleezza Rice has referred to the entire sweep of countries running from the Indian Ocean to the Caucasus as an "arc of opportunity." The American aims are outlined in the Central Asian Infrastructure Integration Initiative, a blueprint prepared by the US Trade and Development Agency for fostering large-scale economic development and cooperation between the two regions.
The emerging economies of South Asia are energy poor, and the emerging economies of Central Asia are either already energy rich, or at least have the potential to become so. The oil and gas wealth of Central Asian states, especially Kazakhstan and Turkmenistan, is well documented. Less known is the fact that Kyrgyzstan and Tajikistan, while oil and gas poor, possess significant electricity-generation potential via hydro-power dams.
Tajikistan, the poorest country to emerge out of the Soviet collapse in 1991, has the world's greatest hydroelectric potential per capita, and Kyrgyzstan is close behind. Supplementing the hydroelectric potential of both of these states is Kazakhstan's large coal-fired generating capacity.
While the national economies of Kyrgyzstan and Tajikistan do not represent a large market for future electrical consumption over the near- and medium-term, large markets for electrical power are developing to the South in Afghanistan, Pakistan and India and to the East, in China. In addition, electricity demand in each region appears to be complementary domestic demand peaks in Central Asia during the winter, while demand peaks in South Asia during the summer months.
Among the Central Asian states (excluding Turkmenistan), total domestic demand for electricity is expected to increase at an annual rate of only 0.3 percent over the next five years. Longer term projections indicate a total domestic annual demand growth of about 2 percent for the entire region, although significantly, Tajikistan's domestic demand would actually contract and it is possible that Kyrgyzstan's domestic demand would also shrink at least over the next 15 years. The decline in demand in Kyrgyzstan would likely be due to increased metering and higher charges for electricity.
At the same time, demand for electrical power in South Asia is projected to increase dramatically. Afghanistan's government forecasts an annual growth in electricity demand through 2020 of between 6.3 and 8.2 percent, with a possible total gigawatt demand by 2020 of 5,640 GWh. Peak load demand by 2020 is likely to range between 911 to 1,316 megawatts, meaning that much of this demand will have to be addressed via electricity imports. Projected demand in Pakistan is significantly greater the country will need to increase its generating capacity an average of 1,500 megawatts per year over the next decade to meet domestic demands. It is highly unlikely that domestic Pakistani power producers could satisfy more than half of this additional demand.
American policy-makers see the development of Central Asia's electrical power-generating potential as a key to both regions' economic development, as well as a path toward political and social stability. Closer Central-South Asian ties would also accomplish another US strategic objective reducing Russia's economic influence over Central Asian states. [For background see the Eurasia Insight archive].
Numerous international lending agencies have launched programs to foster cooperation and to finance construction of regional power transmission infrastructure. The Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD) and World Bank are all actively involved in financing projects that upgrade the existing power grid. These projects would facilitate the expansion of Central Asia's electrical export capacity.
Tajikistan and Kyrgyzstan must both overcome significant obstacles if they are to emerge as significant electricity exporters. The electricity networks in both countries presently are in a dilapidated state and are unable to adequately handle even domestic demand. For example, Dushanbe experienced severe power cuts in late November. The two countries also lack power-generating capacity. However, Tajikistan is currently working to build several new dams and power stations. [For background see the Eurasia Insight archive]. Much of the investment for those projects, however, is coming from Russia, and the Kremlin presumably is not keen to see any slippage in its Central Asian economic position.
The realization of any Central-South Asian export plan would also require a significant upgrade of Afghanistan's power infrastructure. The country currently lacks a national electricity grid. Its system comprises four urban networks centering on the major cities of Kabul, Herat, Kandahar and Mazar-i-Sharif. These systems require integration into a larger, unified grid system. In addition, ensuring the security of long-distance transmission lines would pose a major challenge. It would seem that a prerequisite for any new construction, as well as upgrades, would be the end of the insurgency carried out by Islamic militants. The current trend, however, shows the insurgency gaining strength. [For background see the Eurasia Insight archive].
Reuel Hanks is Associate Professor of Geography at Oklahoma State University. Gregory Gleason is Professor of Political Science at the University of New Mexico.