Meta Data
Draft: 
No
Revision of previous policy?: 
No
Effective Start Year: 
2015
Scope: 
National
Document Type: 
Overarching Policy
Economic Sector: 
Energy, Power
Energy Types: 
Power, Renewable
Issued by: 
Ministry of Energy and Water
Overall Summary: 
The National Renewable Energy Policy (ANREP) aims to mainstream renewable energy in the national energy sector planning so deploying them in different capacities and through different projects in various parts of the Country. It aims to provide a thrust and direction to the renewable energy (REN) sector. The Policy is aligned to the Power Sector Master Plan (PSMP) and the Afghanistan National Development Strategy (ANDS) to set a framework for deployment and growth of REN and it connects with the Rural Renewable Energy Policy (RREP) on the other to ensure seamless adoption and implementation of the policy guidelines in rural energy sector. The Policy sets a target for deploying 350-450 MW of REN capacity by 2032, which is equivalent of 10% of the total energy mix of 3500-4500 MW as per the targets of PSMP. To achieve its targets, the NREP supports the involvement of the private sector, government and non-government organisations, donors and the people of Afghanistan. The Policy will be implemented in two terms- TERM 1 (2015- 2020) will create and support an atmosphere and activities for the development and growth of REN sector particularly in the PPP mode, and TERM 2 (2021-2032) will deploy REN in full commercialization mode.
Access
Bi-, multi-lateral mechanisms to expand access: 
Recognising the catalytic role that NGOs play in implementation of rural community oriented and community focussed REN projects, it would be important to put a formal coordination mechanism in place to ensure exchange of information and ideas on one hand, and to avoid overlaps of efforts on the other. Such a mechanism would be institutionalised in TERM 1 which would also include incentivisation, facilitation and felicitation of NGO led efforts. [...]
Energy access action plan: 
In order to achieve the [...] targets, ANREP TERM 1 will identify high priority sectors with strategic objectives where deployment of REN projects will be taken up in a programmatic mode. [...] Projects include: Distributed generation in economic zones and industrial parks for providing reliable electricity to boost commercial and industrial activities.[...]Biomass energy projects for the rural communities.
Efficiency
EE action plans: 
ANREP TERM 1 will identify high priority sectors with strategic objectives where deployment of REN projects will be taken up in a programmatic mode. [....] Hybridisation of existing diesel based mini-grids with REN with a strategic objective of reducing the consumption of diesel and switching to a cleaner option.
Renewable Energy
RE priorities: 
[O]ptimally deploy and utilise renewable energy resources in all possible manner [...].
RE targets: 
Increase the deployment of Renewable Energy Technologies (RETs) in Afghanistan to meet the targets of PSMP, i.e. 95% of the total energy mix of 5000- 6000 MW in 2032 through grid-connected, mini-grids and stand-alone projects in a manner that REN resources would complement and supplement other forms of energy.
RE action plans: 
The REN will be used in following applications, but not limited to: a. Centralised power generation and feeding to the national and private utility’s grid. b. Mini-grids for distributed generation and supply of electricity for i. nearby loads in industrial, commercial and residential sector under third party sale agreement ii. captive use in industrial, commercial and residential sector iii. replacement of and/or hybridise with diesel based power generating and supply projects iv. rural electrification c. Stand-alone systems and devices for i. rural community for their basic electricity requirements ii. agricultural and other productive applications in both agricultural and non-agricultural sectors iii. usage in rural health centres, street and area lighting, computers in schools, drinking water supply, community welfare centre etc. iv. telecommunication purposes such as mobile phone towers, television etc. v. strategic establishments such as in the military vi. thermal energy for cooking, water heating, steam production, process heat, space heating, and other usage. d. Building energy and green habitats.---1. The ANREP will be implemented in two TERMs to achieve the above goals: ANREP TERM 1 (2015- 2020) will create and support an atmosphere and activities for the development and growth of REN sector particularly in the PPP mode. It will facilitate a transition from donor supported to private investment driven REN sector with an objective of deploying REN in full commercialization mode during its TERM 2 (2021-2032). [...] In order to achieve the above targets, ANREP TERM 1 will identify high priority sectors with strategic objectives where deployment of REN projects will be taken up in a programmatic mode. Hybridisation of existing diesel based mini-grids with REN with a strategic objective of reducing the consumption of diesel and switching to a cleaner option. Rehabilitation of non-operational/ partly operational REN projects preferably through PPP mode ensuring their socio- economic sustainability. [...] Distributed generation in economic zones and industrial parks for providing reliable electricity to boost commercial and industrial activities.[...] Roof-top solar PV projects with or without net metering. Biomass energy projects for the rural communities. b) Customs duty and sales tax exemption for import/ sale of machinery equipment and spare parts meant for the initial installation or for balancing, modernization, maintenance, replacement, or expansion after commissioning of REN projects.
RE prioritization, portfolio standards: 
[...] Utility company (DABS), on the other hand will give the “must-run” status to all REN projects to ensure that all the electricity generated through REN projects in evacuated and utilised. ---To set a precedence and a good example, private utility (DABS) will be encouraged to accept Renewable Purchase Obligations during TERM 1 of ANREP, which would be made mandatory to all industrial and commercial consumers of electricity in TERM 2.
Net metering: 
This policy allows net metering and billing so that the producer can sell surplus electricity at one time and receive electricity from the grid at another time and settle accounts on net basis as agreed under power purchase agreement. This will directly benefit the economics of small scale power producers, dispersed generation and optimize capacity utilization of installed systems. ---Roof-top solar PV projects with or without net metering.
RE capital subsidy, grant, or rebate: 
Provide fiscal and non-fiscal incentives to private sector investors and equipment manufacturers / suppliers to lower the cost of investment, enhance the competitiveness of RETs and nurture the local industry including equipment manufacturers, suppliers and assemblers. ---Considering the fact that REN projects have so far received full funding from donors and are still not able to self –sustain, provision of subsidies is considered necessary and unavoidable. However the subsidies would be reviewed, rationalised and carefully targeted keeping in view affordability and cost effective delivery of reliable energy services. The upfront capital support in the form of subsidies will be provided to all REN projects in order to make them viable by either improving the returns on investment or by reducing the tariffs for commercial and domestic (both urban and rural) consumers. The amount and pattern of subsidy will vary depending upon the technology, location and the design of the project. [...].Subsidies could be given in the form of Preferential Tariffs, Performance Linked Incentives or Viability Gap Funding. Other incentives given to the developers of REN projects will include: a) Interest subsidies and soft loans (low interest rates, moratorium/ grace period on repayment, favourable debt-equity ratio). [...] a)Land acquisition
RE reductions in taxes: 
Other incentives given to the developers of REN projects will include: [...] Income tax exemption for the REN project developer for the first 5 years of its commercial operation.
Cooperation in RE: 
Create mechanisms of involving Government Organisation (GOs), Non-Governmental Organisations (NGOs), donors and communities through capacity building, awareness creation, networking and exposure visits to support the growth and sustenance of REN sector in Afghanistan. ---Foster international cooperation, particularly with countries in the region having similar socio-cultural milieu for cross learning and adoption of good practices.---1.1 financial institution dedicated to REN will be set up during TERM 2 that will provide customised financial support to all REN projects to private sector, local enterprises, NGOs, women led REN businesses and others. It will pool in funds from the government resources, as well as from donors and international financial institutions such as the Asian Development Bank, Islamic Development Bank, World Bank etc. The preparation and the work required for setting up this new institution will be taken up in TERM 1.
Mandatory connection: 
All grid-connected projects meant for third party sale or for captive generation will be allowed to wheel and bank the electricity through the national grid owned and operated by utility company (DABS). A separate wheeling and banking agreement will be drawn up between utility company (DABS) and the project developer. The same principle will apply to other private distribution companies that are likely to come up in near future.
Environment
Decarbonization strategy: 
Considering the fact that REN projects facilitate the adaptation and mitigation measures of climate change, they are eligible for benefitting from several funds dedicated for such purposes. All implementing agencies of REN projects, both in public and private sector, will explore receiving of climate funds to increase the viability of their projects during design and development stage itself.
Energy-water nexus: 
Solar and/or wind pumping with finance facilitation to farmers for increasing the agricultural productivity.
Pricing
Renewable energy subsidies: 
Considering the fact that REN projects have so far received full funding from donors and are still not able to self –sustain, provision of subsidies is considered necessary and unavoidable. However the subsidies would be reviewed, rationalised and carefully targeted keeping in view affordability and cost effective delivery of reliable energy services. The upfront capital support in the form of subsidies will be provided to all REN projects in order to make them viable by either improving the returns on investment or by reducing the tariffs for commercial and domestic (both urban and rural) consumers. The amount and pattern of subsidy will vary depending upon the technology, location and the design of the project. [...].Subsidies could be given in the form of Preferential Tariffs, Performance Linked Incentives or Viability Gap Funding.
Energy pricing: 
For grid-connected projects- Tariffs for grid connected projects will be set on the ‘cost-plus’ basis. [...] For project having distributed generation and local grid- for distributed generation projects supplying electricity to third party, tariffs will be on mutually negotiated basis between MEW/ utility, the project developer and the consumer. Guiding principle for tariff determination could be ‘cost- plus’ basis. [...] For REN-diesel hybrid projects- Tariffs will be based on replacement cost of diesel and/or prevailing tariffs whichever is less. For off-grid stand-alone project- Tariffs will be on mutually negated basis with an oversight provided by the ZREC to ensure that vulnerable communities are not burdened with high and unaffordable tariffs for basic and essential electricity services.
Energy Supply and Infrastructure
Energy mix: 
Increase the deployment of Renewable Energy Technologies (RETs) in Afghanistan to meet the targets of PSMP, i.e. 10% of the total energy mix of 3500-4500 MW in 2032 through grid-connected, mini-grids and stand-alone projects in a manner that REN resources would complement and supplement other forms of energy.
Trade
Import taxes and fee exemptions: 
Other incentives given to the developers of REN projects will include:[...] b) Customs duty and sales tax exemption for import/ sale of machinery equipment and spare parts meant for the initial installation or for balancing, modernization, maintenance, replacement, or expansion after commissioning of REN projects.
Investment
Financial incentives for energy infrastructure: 
In order to support the subsidy requirements and the incentives to the private sector, adequate funds would be required which will be created by pooling-in government budgetary resources and donor funds. These funds will be ring-fenced and managed through mechanism of “basket funds” which will provide the foundation block for setting up a dedicated REN financing institution in future. Donor funds could be tied to specific programmes within the “basket funds” to give some flexibility and accommodate the preferences of donors.---[...] A financial institution dedicated to REN will be set up during TERM 2 that will provide customised financial support to all REN projects to private sector, local enterprises, NGOs, women led REN businesses and others. It will pool in funds from the government resources, as well as from donors and international financial institutions such as the Asian Development Bank, Islamic Development Bank, World Bank etc. The preparation and the work required for setting up this new institution will be taken up in TERM 1.
Tax and duty exemptions for energy equipment: 
Provide fiscal and non-fiscal incentives to private sector investors and equipment manufacturers / suppliers to lower the cost of investment, enhance the competitiveness of RETs and nurture the local industry including equipment manufacturers, suppliers and assemblers.
Independent power producers: 
Private sector as Independent Power Producers (IPP), communities and local entrepreneur will be encouraged to develop and manage REN projects on Built-Own-Operate (BOO) basis, and will be governed by appropriate regulations. ---All grid-connected projects meant for third party sale or for captive generation will be allowed to wheel and bank the electricity through the national grid owned and operated by utility company (DABS). A separate wheeling and banking agreement will be drawn up between utility company (DABS) and the project developer. The same principle will apply to other private distribution companies that are likely to come up in near future.---ANREP allows project developers to set up REN projects both for captive and for third party sale of electricity.[...]
Project permitting: 
Government will facilitate the acquisition of land to project developers for setting up grid-connected and mini-grid REN projects and in some cases, procure and lease them out to the developers on long term basis. The procedure for land leasing will be on the basis of competition.
Investment climate development: 
Provide fiscal and non-fiscal incentives to private sector investors and equipment manufacturers / suppliers to lower the cost of investment, enhance the competitiveness of RETs and nurture the local industry including equipment manufacturers, suppliers and assemblers.---Private sector as Independent Power Producers (IPP), communities and local entrepreneur will be encouraged to develop and manage REN projects on Built-Own-Operate (BOO) basis, and will be governed by appropriate regulations.---The main aim of the ANREP TERM 1 is to prepare the atmosphere to usher in the commercialisation of REN through private sector participation which will be seen in full force during ANREP TERM 2. ---the ANREP TERM 1 will set out following guidelines for attracting private sector investment in REN sector: a. Guidelines for setting up grid-connected REN projects. b. Guidelines for setting up projects for distributed generation with local grid. c. Guidelines for setting up off-grid stand-alone projects.---Other incentives given to the developers of REN projects will include: [...] d) Land acquisition; e) Security during project implementation.
Public Private Partnerships: 
ANREP TERM 1 will identify high priority sectors with strategic objectives where deployment of REN projects will be taken up in a programmatic mode. [....] Rehabilitation of non-operational/ partly operational REN projects preferably through PPP mode ensuring their socio- economic sustainability. [...] Grid-connected projects in Public-Private-Partnership (PPP) mode
Governance
Energy management principles: 
In order to achieve the [...] targets, ANREP TERM 1 will identify high priority sectors with strategic objectives where deployment of REN projects will be taken up in a programmatic mode. [...] Projects include: Powering mobile telephone network and other telecommunication infrastructure through REN in remote areas for enhancing safety and security of communities. ---Recognising the catalytic role that NGOs play in implementation of rural community oriented and community focussed REN projects, it would be important to put a formal coordination mechanism in place to ensure exchange of information and ideas on one hand, and to avoid overlaps of efforts on the other. Such a mechanism would be institutionalised in TERM 1 which would also include incentivisation, facilitation and felicitation of NGO led efforts. [...]
National policy structure: 
The proper AREP implementation will lead to formation of Renewable Energy Law for Afghanistan by 2032, clearly defining the energy share from renewable energy to keep that growing as per Afghanistan National Strategy and other related policies.
Energy institutional structures: 
The Ministry of Energy and Water (MEW) will have primary responsibility for strategizing, planning and coordinating the implementation of ANREP. ---Given the importance of REN and the role it will play in the socio-economic development of Afghanistan, its development needs to be put on a “fast-track” mode. In order to do so, an empowered body “Inter-Ministerial Commission for Renewable Energy (ICRE)” would be set up within the MEW which will have statutory powers and the authority granted by the Presidential Decree to oversee the implementation of ANREP in TERM 1.
Coordination with regional energy associations: 
The policy will create formal linkages and cooperation arrangements with organisation such as IRENA, SAARC Energy Centre, ECO and others.
M&E of policy implementation: 
The Ministry of Energy and Water (MEW) will have primary responsibility for strategizing, planning and coordinating the implementation of ANREP. ---The secretariat for ICRE will be hosted by MEW. Deputy Minister of Energy Secretariat of MEW will be responsible for coordination among several government departments and agencies on behalf of the ICRE secretariat for effective implementation of ANREP.---In accordance with the location specific and decentralised nature of REN, a decentralised governance and coordination structure will be set up wherein zonal level bodies known as Zonal Renewable Energy Centre (ZREC) will be created to oversee the implementation of REN in their respective regions. [...].
Technology
Clean energy technology priorities: 
In order to achieve the [...] targets, ANREP TERM 1 will identify high priority sectors with strategic objectives where deployment of REN projects will be taken up in a programmatic mode. [...] Projects include: Powering mobile telephone network and other telecommunication infrastructure through REN in remote areas for enhancing safety and security of communities.
Clean energy technology deployment: 
Increase the deployment of Renewable Energy Technologies (RETs) in Afghanistan to meet the targets of PSMP, i.e. 10% of the total energy mix of 3500-4500 MW in 2032 through grid-connected, mini-grids and stand-alone projects in a manner that REN resources would complement and supplement other forms of energy.
Technology collaboration with other member States: 
Foster international cooperation, particularly with countries in the region having similar socio-cultural milieu for cross learning and adoption of good practices.