Afghanistan: GOA Confirms Request for Japanese

UNCLAS KABUL 001583 SIPDIS STATE FOR SCA/A, SCA/FO (A/S BOUCHER, GASTRIGHT, DEUTSCH) STATE PASS USTDA FOR DSTEIN/SGREENIP STATE PASS OPIC, USAID OPIC FOR MOSBACHER/ZAHNISER/STEELE MANILA PLEASE PASS ADB/USED NSC FOR AHARRIMAN USAID FOR JKUNDER, MWARD TREASURY FOR ABAUKOL OSD FOR SHINN, SHIVERS CENTCOM FOR CFC-A, CG CJTF-76, POLAD, JICENT SENSITIVE SIPDIS E.O.12958: N/A TAGS: ENRG ECON EPET ETRD KPWR EAID PGOV AF SUBJECT: Afghanistan: GOA Confirms Request for Japanese Assistance for Kabul Power Ref: A) Kabul 1206 and previous B) State 48110 (Notal) Sensitive But Unclassified. ¶1. (SBU) Pursuant to Ref B, Econ Counselor raised the issue of securing Japanese assistance to the Afghan energy sector in separate meetings with Senior Adviser to the President Nadiri and Minister of Economy Shams. In the April 22 meeting with Shams, who chairs the Inter- ministerial Commission on Energy, the Minister reported that he had made a formal written request to the Japanese Ambassador in Kabul for assistance to strengthen the city?s electricity supply. ¶2. In the lead up to the April 29-30 Afghanistan Development Forum (ADF) and the May 1 Joint Coordination and Monitoring Board meeting, Econ Counselor discussed the need for stepped up energy sector support from Japan and other donors in a preparatory meeting with Nadiri and ANDS Coordinator Adib Farhady. Per septel, President Karzai subsequently highlighted the energy sector in his opening remarks at the ADF as the ?top priority sector? for donor attention. Nadiri?s opening remarks also cited electricity as the GoA?s number one donor priority. Minister of Energy and Water Ismail Khan chaired the session on energy at the ADF, where both he and Nadiri mentioned Kabul power supply as an emergency priority issue. ¶3. Economic Counselor also took advantage of the presence at the ADF of Japanese Ambassador Ogawa, the Tokyo-based coordinator for Afghanistan Reconstruction, to engage Ogawa and make the case directly for Japanese energy sector participation. Ogawa agreed it is an important sector, but was noncommittal. ¶4. (SBU) Comment: We believe Japan?s Ambassador to the U.S. may not have been closely following the discussion in Kabul when he implied that the GOA has not raised the Kabul power supply issue as a priority with Japan. In recent months, the GOA has raised few issues with such regularity and at such high levels with the donor community. Shams? letter confirms that the Japanese were formally approached for assistance. While the Ref B exchange presents an encouraging opening, we believe that even if the Japanese come through with some assistance, they will not be able to do so in the urgent timeframe we face for placing the order for Kabul generation capacity. The tender process has already begun, with the issuance of a request for quotation. The due date for the bids is May 15. The target date for placing the order is May 31. If and when the Japanese come through with a contribution, we can envision at least two ways of dealing with it, with the second option probably being the more realistic: -- since the payments for the generators will be made in installments through 2008, we could conceivably use the Japanese money to make future progress payments; -- we can encourage the Japanese to direct assistance for related electricity needs in Kabul, e.g., distribution system upgrade so that the power from the generators and from the Northern Electrical Power Systems (NEPS) can be absorbed efficiently. Wood