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Cablegate: Pdas Mann Scenesetter (Ii): Turkmenistan, Afghanistan And

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O 011334Z MAR 07
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8473
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UNCLAS SECTION 01 OF 02 ASHGABAT 000247

SIPDIS

SENSITIVE

SIPDIS

STATE FOR SCA/CEN (PERRY), SCA/PPD, EUR/ACE

E.O. 12958: N/A
TAGS: ENRG PREL SOCI EAID AF TX US
SUBJECT: PDAS MANN SCENESETTER (II): TURKMENISTAN, AFGHANISTAN AND
ELECTRICITY

REF: A) Ashgabat 242, B) 06 Ashgabat 450

SUMMARY
-------

1. (U) Post's knowledge regarding Turkmenistan's supply of
electricity to Afghanistan remains essentially limited to the scant
and mainly declarative details reported after the Memorandum of
Understanding (MoU) was signed last April 24 by President Niyazov
and an Afghanistani delegation headed by Power and Water Resources
Minister Ismail. Following is mainly a review of those details.
Principal questions from Embassy Ashgabat's perspective for PDAS
Mann to now ask the Energy Minister are offered in para 7.

April 2006 MoU: Review
-----------------------

2. (U) The April 24, 2006 MoU provided for delivery of an
additional 330 MW of electricity per year over and above the
approximately 165 MW already being supplied. The Turkmenistani
government moreover agreed to upgrade and construct necessary
infrastructure so as to expand the power network to additional
Afghanistani towns and cities. Financial details of the deal were
not disclosed, but Niyazov announced that Turkmenistan would write
off half of Afghanistan's debt for previous power supplies, believed
to be around $8 million, as a gesture of goodwill.

3. (U) Turkmenistani media at the time focused reporting on the
ambitious Turkmenistan-Herat-Kandahar-Kabul-Mazar-e-Sha rif-Herat
power loop. Although in discussions preceding the MoU, Niyazov had
reportedly proposed increasing Turkmenistan's exports to Afghanistan
to 800 MW, there was never any discussion of the major specific
improvements in the Herat grid that such a volume would require.
Reputed priority for the GOA is the North East Transmission System
(NETS) that is designed to bring power produced by Afghanistan's
Shabirgan power plant -- supported by imported power from
Uzbekistan, Turkmenistan and Tajikistan -- to the northern and
eastern regions of Afghanistan. The proposed link is most likely
connected to the $6.6 million, 102 km Serhetabad (Turkmenistan)-
Turghundi-Herat transmission line that is capable of transmitting
200 MW. The 2004 Turkmenistan-built link has a 220 kV capacity, but
it is currently operating at 110 kV. The two governments agreed
that Turkmenistani experts would work to resolve the imminent
voltage upgrade.

4. (U) The signed MOU envisaged the extension of 110 kV power lines
from Turkmenistan to Afghanistan's Maruchak and Kalay-Nau cities in
Badghis province and to Hamiyab and Karkin cities in Jawzjan
province. The extensions were to increase power from 40 MW to
approximately 70 MW. The Turkmenistan government also committed to
spend its own funds to build an additional dual-circuit 220 kV link
from the Turkmenabat or Mary power stations in Turkmenistan to the
Afghan border to ultimately connect to Shabirgan and deliver up to
300 MW. The GOA would then link the Shabirgan substation to the
Turkmenistan border. Shabirgan already receives approximately 165
MW via the 110 kV line Imamnazar- Andhoy- Shabirgan built in 2002.
Both sides agreed that the capacity of the line needed to be
increased in order to supply additional power to the city of
Maymene.

Afghan Debt and Turkmen Forgiveness
-----------------------------------

5. (U) The exact amount of Afghanistan's debt was not officially
disclosed at the time of the MoU, but is known to have been around
$8 million. Turkmenistan's official Russian-language newspaper
Neytralny Turkmenistan reported on April 25, 2006 that the money
from the repayment of the remaining Afghan debt would be spent on
construction of power facilities on the Turkmenistan-Afghanistan
border. On February 26, 2007 newly-inaugurated President
Berdimuhammedov announced forgiveness of $4.2 million in a phone
call with Afghanistan president Karzai. Post understands this sum
to have represented the remainder of the original, pre-April 2006
debt, i.e., a new gesture to the Afghans by Turkmenistan. But it
might instead represent relief on new debt arising from gas sales to

ASHGABAT 00000247 002 OF 002


the Afghans since, and under the terms of, the 2006 MoU.

6. (U) Prior to the MoU, Turkmenistan in 2006 was exporting about
1.3 GW a year, including 599 MW to Iran and 535 MW to Turkey, as
well as the 165 MW to Afghanistan. At the current
Turkmenistan-Afghanistan power price, $.02/KWh, Turkmenistan's
potential annual revenue from Afghanistan could reach $9.8 million
annually (based on approximately 490 MW Afghan import assumption).
Turkmenistan's total power production in 2005 was 12.8 MW; no
official figures for 2006 have yet been made public. The
Turkmenistanis may be interested in extending power supplies to
Pakistan to reach a deeper customer base.

Points/Questions
----------------

7. (SBU) As far as post is aware, neither Turkmenistan officials
nor media have offered any accounts that would update the
Afghanistan-electricity status quo described above. There have been
periodic references to infrastructure work on the Afghan border
actually being carried out. Following are points/questions from
Embassy Ashgabat's perspective for PDAS Mann's meetings with
Turkmenistan officials:

-- How much surplus capacity does Mary power station now have
available for increased supply to Afghanistan?

-- What is the ceiling of such supply given the present
transmission-infrastructure constraints (on either side of the
border)?

-- Is Turkmenistan upgrading and constructing necessary
infrastructure so as to expand the power network to extra
Afghanistani towns and cities, as we understand president Niyazov
undertook to do in the April 2006 MoU?

-- What are the commercial terms for current electricity sales? Are
the Afghans now current in their payments?

-- Does the recent announcement of forgiving Afghanistan's debt
constitute complete forgiveness, or does more debt remain?

BRUSH

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