VZCZCXRO0350
PP RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #1481/01 1681333
ZNR UUUUU ZZH
P 161333Z JUN 08
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 4399
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 001481 
 
DEPT FOR SCA/RA, SCA/A, EEB, EEB/ESC/IEC (GRIFFIN) 
DEPT PASS AID/ANE 
DEPT PASS USTR FOR LILIENFELD AND KLEIN 
DEPT PASS OPIC FOR ZAHNISER 
DEPT PASS TDA FOR STEIN AND GREENIP 
CENTCOM FOR CG CFC-A, CG CJTF-76, 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 
USAID FOR WARD 
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH 
 
SIPDIS 
 
E.O. 12958 N/A 
TAGS: ENRG EFIN ETRD KPWR EAID PGOV AF
SUBJECT: AF: UPDATE ON USG ENERGY PROJECTS 
 
¶1. (SBU) The following cable provides an update on USG energy sector 
projects in Afghanistan. 
 
¶2. (SBU) KABUL 100 MW GENERATOR SETS (GENSETS) - Work on the site 
continues apace and the contractor appears to be on schedule. 
Arrangements for the transportation of the generator sets themselves 
to Afghanistan and subsequently to the site are complete. 
 
¶3. (SBU) North East Power System (NEPS) - Task orders to proceed 
with the Reactive Power Compensation and NEPS Control Center 
projects have been signed and are moving forward. 
 
¶4. (SBU) NEPS - TURKMEN COMPONENT - USAID will issue tender 
documents for the construction of a substation at Andkhoy, near the 
Turkmen border, once there is an agreed-upon good-faith commitment 
by the Turkmen government to construct their portion of the NEPS 
line - approximately 400 km within Turkmenistan.  We believe this 
commitment will come in the form of a Memorandum of Understanding 
(MOU) or Power Purchase Agreement (PPA) between the Afghan and 
Turkmen governments some time before August 15, 2008. 
 
¶5. (SBU) NEPS - UZBEK COMPONENT - Negotiations to set a final 
construction price continue.  Despite many delays, an Uzbek two-man 
technical team arrived in Naibabad, Afghanistan near the border with 
Uzbekistan on June 9.  They, their Afghan counterparts, and 
donor-funded advisors are reviewing the status (and technical 
specifications) of the NEPS line already constructed between the 
Uzbek border and Kabul.  This is being done to allay Uzbek concerns 
about Afghanistan's ability to properly absorb and use the 150 MW of 
power to be imported from the Uzbeks.  This has been a prerequisite 
to Uzbekistan concluding both a construction contract and PPA with 
Afghanistan for the construction of the 43 km line within Uzbekistan 
to facilitate power export to Afghanistan. 
 
¶6. (SBU) Although Embassy Kabul has received some reports indicating 
the Uzbek power utility, Uzbekenergo, claims to have already begun 
work on the construction of the power line, we have been unable to 
confirm.  However, Mr. Ghulam Rabbani, Energy Advisor to the 
Minister of Energy and Water, and former General Director of the 
Afghan power utility DABM, claims this could be possible because the 
new Uzbek line follows the route of an older, defunct line. 
According to Rabbani, much of the preparation (like clearing and 
leveling) was done previously, cutting the time needed for 
construction of the new line.  In fact the most difficult towers to 
construct for the line, on either side of the Panj River between 
Uzbekistan and Afghanistan, are already in place.  While the Uzbeks 
claim they will need six months to complete the line, Rabbani 
believes they are hedging their bets and once begun in earnest, the 
line could be completed in as little as three to four months. 
Without a signed construction contract however, it is difficult to 
predict if Uzbek power will be available for the 2008-2009 winter 
heating season in Kabul. 
We continue to monitor the progress of these negotiations. 
 
¶6. (U) NEPS - TAJIKISTAN COMPONENT - Following successful meetings 
in Dushanbe in April, negotiations on a PPA with the Tajiks appear 
almost complete.  Minister of Energy and Water Ismail Khan is 
expected to travel to Dushanbe June 20 for the official signing 
ceremony.  This will allow the Asian Development Bank (ADB) to 
proceed with its internal processes to fund the construction of the 
Afghan NEPS line to Tajikistan, which will run from Pul-e-Khumri 
north through the cities of Baghlan and Kunduz to the Tajik border. 
 
¶7. (SBU) The proposed PPA between the Tajiks and Afghans provides 
that by 2010 Tajikistan will sell at least 400 million KWH per year 
to Afghanistan during the five-month peak hydro-power season from 
May to September.  The agreement is to take effect on May 1, 2010 
for a period of 20 years.  The price per megawatt hour will be 0.035 
 
KABUL 00001481  002 OF 002 
 
 
USD (for firm energy), with a two percent yearly increase.  New 
negotiations are expected in 2013 should the Tajiks build additional 
facilities and the Afghans wish to purchase additional energy. 
 
¶8. (U) SHEBERGHAN GAS FIELDS TESTING - USAID expects to obtain an 
indemnification letter from the Ministry of Mines for its 
subcontractor by June 17.  With this letter in hand we expect a 
final contract signing which will allow mobilization into the field 
in August, with initial well test results expected by mid 
September. 
 
¶9. (U) South East Power System - SEPS - As always, security problems 
persist at the site, but work continues.  In addition to the work on 
the Kajaki Dam's turbines, USAID is proceeding with an RFP for the 
assessment and repair of the 110 kv power line from the dam's power 
house to Durai Junction (south West) and to Mousa Qala (West).  This 
is expected to be completed by the end of July.  A recent 
three-dimensional aerial survey of the 110 kv line route will prove 
a useful tool in its rehabilitation as well as in the construction 
of future 220 kv line. 
 
DELL