Afghanistan Rural Energy Market Transformation Initiative – Strengthening Resilience of Livelihoods Through Sustainable Energy Access

The Afghanistan Rural Energy Market Transformation Initiative aims to reduce reliance on diesel and kerosene in rural areas by transitioning to renewable energy mini-grids. The project focuses on a three-phased approach, starting with a pilot phase that includes the construction of three solar mini-grids with a combined capacity of 2.6 MW in Kandahar, Parwan, and Khost. To ensure long-term sustainability and private sector engagement, the initiative will develop a mini-grid policy, technical standards, and a financial de-risking framework, including a viability gap funding mechanism. It also establishes a 'Rural Electrification Department' under the national utility DABS and provides capacity building for Renewable Energy Service Companies (RESCOs). The project expects to benefit 49,000 people and reduce emissions by 173,082 tCO2eq over 25 years.

• The project will implement three greenfield solar mini-grids in the provinces of Kandahar, Parwan, and Khost with a total combined capacity of 2.6 MW, targeting 49,000 beneficiaries, including 23,500 women.
• The initiative is expected to reduce greenhouse gas emissions by 173,082 tCO2eq over the 25-year lifespan of the three solar mini-grids by replacing diesel and kerosene fuel.
• The project employs a three-phased market development process: a first pilot phase using a semi-utility ownership model with outsourced O&M, followed by a scale-up phase with private sector ownership (BOOT/BOO models), and a final maturity phase with minimal public support.
• To address the lack of institutional frameworks, the project will facilitate the creation of a separate Rural Electrification Department (RED) under the national utility Da Afghanistan Breshna Sherkat (DABS).
• A financial de-risking framework will be designed to improve the viability of mini-grids, specifically proposing a viability gap funding mechanism to make projects attractive to private investors.
• The project will establish an 'upscaling platform' to enable future expansion, consisting of a practical development manual, an online data sharing platform, and technical investment design reports for five additional mini-grids (three solar and two hydro).
• Private sector capacity will be strengthened through the training of Renewable Energy Service Companies (RESCOs) in technical design, installation, and business models to move beyond simple O&M services.
• The total financing for the project is 21,398,843 USD, with a GCF grant request of 17,198,843 USD and co-financing of 4,200,000 USD from the Ministry of Rural Rehabilitation and Development (MRRD) and UNDP.

APA

Green Climate Fund (2020). Afghanistan Rural Energy Market Transformation Initiative – Strengthening Resilience of Livelihoods Through Sustainable Energy Access. https://www.greenclimate.fund/sites/default/files/document/fp129-undp-afghanistan_0.pdf

Chicago

Green Climate Fund. Afghanistan Rural Energy Market Transformation Initiative – Strengthening Resilience of Livelihoods Through Sustainable Energy Access. 2020. https://www.greenclimate.fund/sites/default/files/document/fp129-undp-afghanistan_0.pdf.

Wikipedia

{{cite report |author=Green Climate Fund |title=Afghanistan Rural Energy Market Transformation Initiative – Strengthening Resilience of Livelihoods Through Sustainable Energy Access |date=21 August 2020 |url=https://www.greenclimate.fund/sites/default/files/document/fp129-undp-afghanistan_0.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greenclimatefund2020afghanistan, author = {{Green Climate Fund}}, title = {{Afghanistan Rural Energy Market Transformation Initiative – Strengthening Resilience of Livelihoods Through Sustainable Energy Access}}, institution = {Green Climate Fund}, year = {2020}, month = aug, url = {https://www.greenclimate.fund/sites/default/files/document/fp129-undp-afghanistan_0.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }