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Viewing cable 08KABUL1644, AF: Uzbek power situation not as bleak, other PPA's on

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Reference ID Created Released Classification Origin
08KABUL1644 2008-07-02 11:31 2011-08-24 01:00 UNCLASSIFIED Embassy Kabul
VZCZCXRO8161
PP RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #1644/01 1841131
ZNR UUUUU ZZH
P 021131Z JUL 08
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 4564
INFO RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEKJCS/OSD WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS SECTION 01 OF 02 KABUL 001644 
 
DEPT FOR SCA/RA, SCA/A, EEB, EEB/ESC/IEC (GRIFFIN) 
DEPT PASS AID/ANE FOR WARD 
DEPT PASS USTR FOR LILIENFELD AND KLEIN 
DEPT PASS OPIC FOR ZAHNISER 
DEPT PASS TDA FOR STEIN AND GREENIP 
CENTCOM FOR CG CSTC-A, CG CJTF-101, POLAD, JICENT 
NSC FOR JWOOD 
TREASURY FOR ABAUKOL, BDAHL, AND MNUGENT 
MANILA PLEASE PASS ADB/USED 
PARIS FOR USOECD/ENERGY ATTACHE 
OSD FOR SHIVERS, SHINN 
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH 
 
SIPDIS 
 
REF: KABUL 1581 
 
E.O. 12958 N/A 
TAGS: ENRG EFIN ETRD KPWR EAID PGOV AF
SUBJECT: AF: Uzbek power situation not as bleak, other PPA's on 
track. 
 
1. (SBU) Summary:  Minister of Economy Jalil Shams told donors the 
Uzbeks have begun manufacturing components needed for the 
Afghan-Uzbek power line.  He believes the project will be completed 
by October 2008.  Shams revealed a "backup" plan to import an extra 
43 MW of Uzbek power to Kabul along an existing 110 kv line should 
the new line not be completed by winter.  The GIRoA expects to 
conclude a PPA with the Tajiks soon for a price close to Tajik 
terms. 
 
------------------------------------- 
Tajik and Turkmen PPAs Moving Forward 
------------------------------------- 
 
2. (SBU) Afghanistan's Interministerial Committee on Energy (ICE) 
held its monthly meeting on June 26, 2008 to review the current 
status of the North East Power System (NEPS) project, including the 
progress towards the conclusion of commercial power purchase 
agreements (PPA's) with its northern neighbors, Turkmenistan, 
Tajikistan and Uzbekistan.  Despite failed negotiations in Dushanbe 
on June 20 (Reftel), Minister of Energy and Water Ismail Khan 
assured donor country representatives he expected to conclude a PPA 
with the Tajiks in one to two weeks.  He has proposed to pay USD .03 
(three cents) per kilowatt hour for Tajik power and expects that an 
agreement will be reached soon.  Minister of Economy Shams stated 
that ongoing negotiations with the Turkmen are positive and the 
parties hope to come to an agreement by mid-August. 
 
------------------------ 
Uzbek Transmission Lines 
------------------------ 
 
3. (SBU) Minister Shams reported he is fairly confident that the 43 
kilometers of transmission line being erected in Uzbekistan will be 
completed by October.  He said the Uzbeks have completed the 
fabrication of up to 60 percent of the structures needed for the 
transmission towers, (which still need to be erected), and that only 
the site erection and construction of cement components remained 
before the line could be strung.  He did not indicate the source of 
this information. 
 
4. (SBU) According to a protocol signed between the Uzbeks and 
Afghans in early June during their last negotiating session, the 
Afghans were to make an initial payment of USD 2.5 million to 
initiate project construction.  Deputy Minister of Finance Sharani 
assured the ICE that payment could be made within 72 hours. Post 
confirmed that payment is expected on or by July 3.  This initial 
payment represents the first of three to be made to the Uzbeks in 
the following order:  20 percent (of the USD 12.5 million total) as 
an advance, 70 percent during the construction phase, and 10 percent 
upon the energizing of the line.  Minister Shams explained that 
while all the pricing details have yet to be worked out to the 
satisfaction of both parties, by making the initial payment 
Afghanistan hoped to spur the Uzbeks into action in an attempt to 
ensure power imports to Kabul by the winter of 2008-2009. 
 
5. (SBU) Shams explained that should the Uzbek line construction 
take longer than anticipated Kabul can still receive Uzbek power for 
the winter.  There is currently a ten-year-old agreement in place 
with Uzbekistan under which Afghanistan can purchase up to 150 
megawatts (MW) of power from that nation.  (The only way to move 
power between the two nations however is a 110 kV line which can 
carry a maximum of 70 MW at any time.)  Currently the government is 
purchasing 27 MW which flows from Uzbekistan directly to the city of 
Mazar-e-Sharif.  Shams stated that should the Uzbek 220 kV line not 
be completed in time, the Afghan government intended to cite the 
current agreement with Uzbekistan in order to maximize the power 
 
KABUL 00001644  002.2 OF 002 
 
 
flowing into the 110 kV line and move the additional 43 MW to Kabul. 
 This arrangement would also allow NEPS project managers to energize 
the 220 kV NEPS power line all the way to Kabul and perform 
necessary tests and maintenance prior to the import of larger 
amounts of power. 
 
WOOD