VZCZCXRO5384
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHAH #0317/01 0851220
ZNR UUUUU ZZH
R 261220Z MAR 07
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 8566
INFO RUCNCIS/CIS COLLECTIVE
RUEHBUL/AMEMBASSY KABUL 0671
RUEHNE/AMEMBASSY NEW DELHI 0725
RUEHIL/AMEMBASSY ISLAMABAD 1928
RUEHLM/AMEMBASSY COLOMBO 0229
RUEHKA/AMEMBASSY DHAKA 0251
RHMFIUU/CDR USCENTCOM MACDILL AFB FL//CCJ2/HSE/CCJ5//
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC//J5/RUE//
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC//DHO-2/REA/NMJIC-J2//

UNCLAS SECTION 01 OF 02 ASHGABAT 000317 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN (PERRY), SCA/PPD, SCA/A; ASTANA PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: ENRG EAID AF TX UZ TI IR
SUBJECT: TURKMENISTAN, AFGHANISTAN TO EXPAND ELECTRICITY TRADE 
 
Ref:  06 Ashgabat 450 
 
¶1.  (U) Sensitive but unclassified.  Please handle accordingly.  Not 
for public Internet. 
 
¶2.  (U) SUMMARY:  USAID-Kabul's power team concluded an 
"understanding" March 23 in Ashgabat that is likely to lead to 
Turkmenistan providing northwest Afghanistan (initially) a regular 
supply of electricity from the gas-fired plant at Serdar.  However, 
sooner rather than later, Turkmenistan will need help to understand 
and implement legal requirements for contracts in international 
markets.  END SUMMARY. 
 
¶3.  (U) Acting Charge met with USAID/Kabul-contracted energy trade 
specialist Ramses Khalil and members of his team March 23.  Also 
present were Afghanistan's Ambassador to Turkmenistan, and 
Afghanistan's Deputy Minister of Mines and Industries Mir Sediq. 
 
NORTH EAST POWER SYSTEM (NEPS) PROJECT 
 
¶4.  (U) The USAID team came to Turkmenistan to discuss electricity 
trade and transit issues with the Ministry of Energy and Industry of 
Turkmenistan as part of the North East Power System (NEPS) Project. 
NEPS is an Afghan government initiative and multi-donor project 
consisting of generation, transmission, and distribution, which will 
combine imported power with domestically generated power for 
Afghanistan.  NEPS seeks electricity exports from Turkmenistan, 
Uzbekistan, and Tajikistan. 
 
EXISTING POWER LINES AND CAPACITY 
 
¶5.  (U) Currently, two high-voltage lines run from Turkmenistan to 
Afghanistan.  The first, from Mary (in Turkmenistan) to Herat, is 
designed for 220 kilovolts (kV), but operates at 110 kV.  Built 
three years ago to deliver electricity to Afghanistan, the line is 
still in good condition and can probably be converted to a 220 kV 
line in two to five years.  The other line, 110 kV, runs from 
Turkmenistan to Andkhoy and electrifies the majority of Afghanistan 
around Andkhoy.  A third line, still to be constructed, would run 
from Mary to Tagtabazar to Marcik. 
 
¶6.  (U) According to the USAID contractors, Turkmenistan is 
producing 3,200 megawatts (MWs) of power a year.  Given 
Turkmenistan's political decision to cut the flow of power to 
Uzbekistan, Turkmenistan has an excess of power from its gas-fired 
power plant in Serdar, near Turkmenabat, which, even during summer 
peaks, amounts to about 2,200 MW.  The USAID team has validated that 
Turkmenistan, which has more excess power than either Uzbekistan or 
Tajikistan, has both the capacity and will to sell the 300 MW of 
electricity Afghanistan currently seeks. 
 
TURKMENISTAN'S PROPOSAL 
 
¶7.  (SBU) During the USAID team's most recent visit, the Government 
of Turkmenistan proposed to supply power to Afghanistan through a 
500 kV high-power line that it would build from the Serdar power 
plant to the Turkmenistan-Afghanistan border at Sheberghan; 
Afghanistan would then build the lines from the border to 
Sheberghan, to Mazar-e-Sharif, and onwards.  The Government of 
Turkmenistan would fully fund the 400-kilometer line within 
Turkmenistan at a cost of approximately $200,000 per kilometer. 
However, Turkmenistan stated that it did not want the 500-to-220 kW 
step-down transmission sub-station, which would cost an additional 
$30-40 million to build, on its side of the border.  (Note: 
According to Khalil, USAID was willing to consider building the line 
from Sheberghan to the Turkmenistani border and possibly the 
step-down substation.  End Note.)  Khalil estimated that, once all 
the paperwork was signed, the Turkmenistan segment of the line would 
take about 18 months to complete.  If built, such a line would 
satisfy the current Afghanistan power demand. 
 
EVENTUAL POWER PURCHASE AGREEMENT? 
 
¶8.  (SBU) Khalil informed Embassy that, during his visit, the two 
sides had not discussed concrete terms, although Turkmenistan had 
said it was agreeable in principle to a long-term power purchase 
agreement (PPA).  The USAID team had left an executive summary, 
 
ASHGABAT 00000317  002 OF 002 
 
 
which could become the basis for a PPA, but Turkmenistan had refused 
to sign an "agreement."  Khalil and his team left with a two-page 
"protocol" that he believed could be agreed to in about two months. 
 
 
OTHER NEIGHBORS AND PROJECTS 
 
¶9.  (SBU) Khalil said Afghanistan sees Turkmenistan as currently the 
most reliable partner from which to purchase electricity.  He 
characterized Tajikistan potentially a good partner but currently 
"over-promising" because Tajikistan will not be able to provide a 
regular flow of electricity until Sangtuda-2 and, probably, Rogun 
dams and power stations are completed - "10-12 years from now."  For 
the same reason, Khalil implied, the recent 
Tajikistan-Afghanistan-Iran announced agreement for a high-tension 
line from Tajikistan across Afghanistan to Iran is decidedly much 
less than meets the eye. 
 
¶10.  (SBU) COMMENT:  Turkmenistan can be a reliable source of 
electricity for northwest Afghanistan, and eventually further afield 
in Afghanistan, because of the reliable supply from gas-fired power 
plants.  Sooner rather than later, Turkmenistan will need help to 
understand and implement legal requirements for contracts in the 
international market.  END COMMENT. 
 
HOAGLAND