Afghanistan Power Sector Guide

The following is an introduction to our Afghanistan Power Sector Guide. To read the guide in full, select 'Read full article'.

Introduction

Afghanistan’s power sector is the cornerstone of the country’s economic development agenda, underpinning ambitions of industrialisation, economic growth and improved living standards. Despite the abundant resources - including hydropower, solar, wind and gas - Afghanistan continues to face energy access challenges.

Per capita electricity consumption remains among the lowest in the world due to limited domestic generation capacity and underdeveloped infrastructure. Grid-based electricity currently reaches only 30-35% of the population, with access concentrated in urban centres such as Kabul, Herat and Mazar-e-Sharif. Rural areas remain largely underserved, with most households relying on traditional biomass or off-grid solutions. A growing pipeline of energy projects and promotion of both domestic and foreign investment in the country’s power sector signal a pivotal shift toward greater energy self-sufficiency and long-term sustainability.

Emerging from over 40 years of conflict, Afghanistan’s power sector presents an attractive opportunity for investment as the country seeks to bridge the significant gap between supply and demand by expanding domestic power generation and enhancing transmission and distribution infrastructure through Independent Power Projects (IPPs) and Public-Private Partnerships (PPPs). The convergence of the development of its untapped mineral resources and commitment to infrastructure development (including in the power and transport sectors) signals substantial opportunities for investors in Afghanistan.