Mazar-e-Sharif’s electricity supply currently hinges largely on hydropower and the Northern Fertilizer and Power Plant (48 MW, pictured). Hence the new Ghazanfar Group’s IPP project is urgently needed to avert power shortages. All electricity produced by the 59 MW gas IPP will be bought by the Afghan utility DABS.
Developed as a greenfield plant, the IPP will be fuelled by natural gas sourced from the Sheberghan fields. The developers expect to generate around 400 GWh of electricity annually for the residents of Mazar-e-Sharif, Kabul, and Jalalabad.
Afghanistan's first IPP
The Mazar-e-Sharif gas power plant is Afghanistan’s first long-term public-private partnership, financed through a $21.2 million senior loan of the International Financial Corporation (IFC) and $1.5 million of client risk-management swap.
In addition, the IFC mobilised $41.2 million in parallel loans from other lenders, including the Germany’s DEG and the Asian Development Bank (ADB). The financing package also includes a $12 million guarantee from World Bank affiliate IDA, designed to give developers short-term liquidity for payment obligations to the Afghan utility and power offtake DABS.
Nena Stoiljkovic, the IFC’s vice president for Asia and Pacific, said “the project sends a clear signal to the world that internationally bankable deals with the private sector are possible in Afghanistan.