Under Sanctions, Taliban Pay Debts, Seek More Electricity From Neighbors – Voice of America – VOA News

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Afghanistan has cleared its outstanding electricity debts to three Central Asian neighbors and is negotiating for an increase in energy supplies, a move that could signal the Taliban government is moving toward economic stabilization.

Landlocked Afghanistan relies heavily on energy imports, obtaining more than 70 percent of its electricity from Tajikistan, Uzbekistan, and Turkmenistan, as well as some from Iran.

This year, Tajikistan officials say they will export 1.9 billion kilowatt-hours of power to Afghanistan, a 17% boost from last year.

Taliban officials are actively seeking further increases from Turkmenistan and Uzbekistan, according to DABS, the Taliban-run national electricity company of Afghanistan.

In December, Afghanistan renewed electricity purchase agreements with the three Central Asian republics, securing continued energy supply.

Afghanistan’s electricity payments fell into arrears following the collapse of the former government in August 2021. This prompted service cut-off threats from some suppliers.

Facing severe banking and economic sanctions, the new Taliban government struggled to make timely payments for nearly a year.

Last week, a spokesperson for DABS said Kabul paid a staggering $627 million in bills incurred by the former government.

However, Amanullah Ghalib, a former DABS director, disputes this figure.

“The outstanding payments were $40 to $50 million tops,” Ghalib told VOA.

“Payments were due every two weeks, and delinquencies incurred strict fines and fees. It was not like DABS had not paid for years or months.”

Afghanistan pays approximately $250 million annually for 600 to 650 megawatts of imported electricity, Ghalib added.

VOA reached out to the spokesperson for DABS for clarification on the payment and amount, but he declined to comment.

Business over politics

Despite none of the three Central Asian energy suppliers officially recognizing the interim Taliban government, economic interests continue to drive their ongoing deals with Kabul.

While Turkmenistan maintains robust trade with Afghanistan, Tajikistan has offered shelter to some anti-Taliban insurgents, and Tajik President Emomali Rahmon has called for the formation of an inclusive Afghan government.

“Economic interests make them deal with the Taliban,” said Ghalib about relations between Afghanistan and its neighbors.

With warnings of economic collapse following the Taliban’s return to power in August 2021, Afghanistan’s economic picture remains complex.

Donors, who provided more than half of the former Afghan government’s budget, cut off development aid, imposed sanctions on the country’s fragile banking sector, and froze more than $9 billion of its financial assets abroad.

However, the World Bank reports that the Afghan currency has remained stable against others, annual domestic revenue hit about $2 billion, and exports reached $1.9 billion in 2023.

“While there are a few bright spots in the overall macroeconomic picture of Afghanistan since the Taliban takeover in 2021, the economy’s overall situation is deeply troubling,” Khaled Payenda, former Afghan finance minister, told VOA.

Poverty and unemployment have risen sharply in the country since the Taliban’s return to power, aid agencies have reported.

“The Afghan economy cannot be sustainable in the long run without a growth engine, which has been missing,” Payenda said.

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