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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.