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Cablegate: Progress On Afghan Electricity From Uzbekistan?

VZCZCXRO3117
PP RUEHIK RUEHPOD RUEHYG
DE RUEHBUL #3993/01 3381302
ZNR UUUUU ZZH
P 041302Z DEC 07
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 1637
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0569
INFO RUEHNT/AMEMBASSY TASHKENT 6879
RUEHJI/AMCONSUL JEDDAH 3352
RUEHDBU/AMEMBASSY DUSHANBE 0432
RUEHAH/AMEMBASSY ASHGABAT 5676
RUEHTA/AMEMBASSY ASTANA 0013
RUEHNE/AMEMBASSY NEW DELHI 7174
RUEHUL/AMEMBASSY SEOUL 0092
RUEHKO/AMEMBASSY TOKYO 1970
RUEHML/AMEMBASSY MANILA 1644
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
RUCNDT/USMISSION USUN NEW YORK 4301

UNCLAS SECTION 01 OF 02 KABUL 003993

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E.O. 12958 N/A
TAGS: ENGR ECON EPET ETRD KPWR EAID PGOV AF
SUBJECT: Progress On Afghan Electricity from Uzbekistan?

1. (SBU) SUMMARY: Discussion with Afghans and donors on the North
East Power System (NEPS) connection to Uzbekistan, yielded signs of
increased Uzbek commitment to provide 150 MW of electricity to
Afghanistan by the end of 2008 (including completing 43 KM of
transmission lines to the Afghan border). Uzbek commitment was
reiterated at the highest level to Afghanistan and the Asian
Development Bank (ADB). An Afghan delegation to Tashkent the week
of November 20 tested the Uzbek engagement on technical and
commercial issues. We will evaluate the results of that mission
prior to engaging further on this question with the Uzbeks. The ADB
reps confirm that they were prepared to organize payment guarantees
if the Uzbeks requested some proof of Afghanistan's ability to pay.
END SUMMARY.

2. (SBU) SCA Senior Advisor, Robert Deutsch, held a series of
meetings November 12 and 13 on Afghan and donor efforts to complete
arrangements for the connections of the developing Afghan NEPS
electricity grid to its northern neighbors. Deutsch reviewed the
status of the arrangements with the Ministers of Economy and Energy
and Water and with key representatives of ADB, World Bank (WB) and
Islamic Development Bank (IDB), all of whom were present in Kabul
for the Central Asia South Asia Regional Electricity Market
Ministerial (CASAREM). The discussions focused mainly on completing
the Uzbek inter-connection and electricity trade commitment. The
Afghans and the international financial institutions (IFIs) believe
that with accelerated activity on the part of the Uzbeks that could
have some 100 MW of power could flow on the NEPS to Kabul by late
2008.

3. (SBU) Over the last several weeks, there were significant
exchanges between Uzbekistan and Afghanistan and with the ADB and
IDB on the margins of the Central Asian Regional Cooperation
Conference (CAREC) in Dushanbe, November 2 and 3. According to
Minister of Economy, Dr. Mohammad Jalil Shams, Afghan First
Vice-President Ahmad Zia Masoud visited Tashkent and received
renewed confirmation of Uzbekistan's commitment to take the steps
required to provide power.

4. (U) ADB Energy Project Officer, Jim Liston, reported that ADB
President Kuroda had met with President Karimov, and the latter, in
the presence of the head of Uzbekenergo, assured Kuroda that he was
committed to providing increased electricity to Afghanistan.

5. (SBU) Consistent with these renewed political commitments, Dr.
Shams told us that the Uzbeks have invited the Afghans to send a
delegation to Tashkent to pursue the technical discussions necessary
to complete power sales arrangements. That exchange was to begin in
November when an Afghan delegation led by the Deputy Minister of
Energy and Water was to have visited Tashkent. The delegation was
to have met at Uzbekistan's southernmost substation at Surkhan to
review the capacities of the connecting point for power to
Afghanistan. Dr. Shams indicated that the Uzbeks are said to have
begun work on extending 43 KM of 220 KV transmission line from the
Surkhan substation to the Uzbek border, in order to deliver the
increased electricity to Afghanistan; the delegation had hoped to
see signs of that effort. USAID contractor advisors had prepared
the Afghan team for both the technical and commercial issues they
needed to address with the Uzbeks, but Dr. Shams told us that he

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believed that the Uzbeks would not react positively to a direct USG
role in this effort, and his strong preference is to continue the
effort with U.S. assistance only behind the scenes.

6. (SBU) According to the IDB regional project officer, Imtiarz
Hizkil, who came to Kabul via Tashkent, the Uzbeks are not seeking
external financing for the 43 KM line south of Surkhan. They have,
however, expressed an interest in assistance with the 500 KV line
stretching the 200 KM between the Guzar and Surkhan associated
transformers that will be required to make 300 MW available to
Afghanistan. Hizkil indicated that the IDB and ADB are continuing
discussions with the Uzbeks on financing for that project. Hizkil
noted that his trip to Uzbekistan was connected to a project review
of another ongoing electricity transmission project. In response to
our query he opined that the IDB experience left him convinced the
Uzbeks would not have a problem constructing the 220 KV line the 43
KM to the border and would need only limited quantities of readily
available components from outside Uzbekistan.

7. (SBU) In commenting on the renewed activity, Rune Staune of ADB
said that ADB has informed the Uzbeks that it would be willing to
organize a payment guarantee on behalf of the Afghans, if the Uzbeks
deemed that a group we agreed that a full power purchase agreement
is not necessary and a relatively simple agreement should be
sufficient. However, a payment guarantee would necessitate some
more detailed commitments.

8. (SBU) COMMENT: The diplomatic and technical activity on the
Uzbek-Afghan electric connector is encouraging. Embassy Kabul and
USAID energy contractors will continue to support and prepare the
Afghans in this regard. Given their reluctance to have the U.S.
play a more visible role at this point, we will want to hear the
results of the Afghan's efforts before determining how the U.S. will
engage further directly with the Uzbeks. END COMMENT.

9. (U) This message was drafted by SCA Senior Advisor, Robert
Deutsch.

DELL

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