 Good morning, ladies and gentlemen. Welcome to CSIS. My name is Andy Cuchins, and I'm director of the Russia and Eurasia program here and very pleased to be chairing what is the the second half of our doubleheader so to speak discussing energy issues in Central Asia and South Asia and some very promising and exciting projects to bring energy regional connectivity between the two two areas and sets sets of countries Yesterday, we put more focus on the discussion of the TAPI TAPI pipeline and today We're going to be discussing in much greater depth the two tap interconnection concept and Casa 1000 projects The two tap I love that acronym Reminds me of a band back in the 1980s called Aztec two-step for some reason Two tap of course stands for Turkmenistan is Pakistan Tajikistan Afghanistan Pakistan got it Pakistan Afghanistan Tajikistan is Pakistan Turkmenistan backwards and this is a project which is initiated by the Asian Development Bank and The Casa 1000 project is a project of course initiated by the World Bank So we're delighted to have representatives from both the Asian Development Bank and the World Bank here today Along with the bottom of Sumar who's the deputy assistant secretary at the Bureau of South and Central Asian Affairs Welcome here to CSIS There's been a slight some changes in in the program We thought we would improve the program. We weren't satisfied with those who are initially listed. I'm just kidding about that I want that to get back to Tarun and to Ranjit but Speaking first will be Jim Liston from the Asian Development Bank who's the principal energy specialist in the energy division at the Central and West Asia Department of the ADB and Following Jim from the World Bank will be Julia Bucknell Who is the manager for Energy in the South Asia region at the World Bank delighted to have Julia with us and then Discussing and kind of putting the whole package together. I think will be Sumar the deputy assistant secretary for South and Central Asian Affairs at the Department of State So with no further ado, let me turn the floor over to Jim And Let's rock and roll Thank you, Andy. Good morning, ladies and gentlemen. Thank you for joining our talk this morning I'll speak for maybe about 20 minutes 30 minutes and Actually, we have even though the logo here says ADB in fact the subject We're talking about is a joint topic between World Bank and ADB and in fact when it comes to the CASA portion Julie will step up. So you can view this presentation really as a joint Deck from from from both our organizations So if without further ado Let's just put the the Project and the location into some geographic context For those of you who are not aware The region we're talking about Central Asia is comprised of Five countries Central Asian Republics Turkmenistan, Uzbekistan, Tajikistan, Kyrgyz Republic and Kazakhstan in south of this region up in the north we have of course Afghanistan and Pakistan So when we talk about electrical connectivity between Central Asia and South Asia At this stage the initial stage of developments is actually linking Central Asia to Afghanistan and Pakistan Now and why are we linking Central Asia to? Pakistan well first of all Central Asia is enjoys tremendous energy resources When in excess of its needs You've got the three Downstream countries Turkmenistan Uzbekistan and Kazakhstan been immensely rich in fossil fuels Turkmenistan is the fourth largest gas or Possesses the fourth largest gas reserves in the world Uzbekistan is rich in coal and Gas and Kazakhstan is rich in all resources the figures are quoted here in terms of million tons of oil equivalent and Upstream and I use the word upstream because these countries are linked through two rivers The Amadaria and the Sirdaria and upstream you have two Smaller countries Kyrgyz Republic and Tajikistan and these two smaller countries are rich in hydro resources So we've got a hydro and thermal rich area all wishing to to use this natural resource and export energy now But in during the Soviet era the the planners Capitalized on this hydro thermal Split between the the countries and they constructed large dams to to store the water in Kyrgyz Republic and Tajikistan So that the water was restored and released during summer Down the Amadaria and the Sirdaria to provide a Irrigation source for the the crops in the three downstream countries Kazakhstan Turkmenistan and Kazakhstan Turkmenistan Uzbekistan Now when you release water of course you can generate electricity Electricity so they had turbines to generate electricity, but the demand in the upstream countries During summer was was low So when they released water they generated electricity and the electricity was at that time Exported to the downstream countries who then did not use their fossil fuel resources to generate electricity and in in return in winter when the upstream countries Were actually in deficit the downstream countries would send the electricity back and now generally which was now generated from gas and coal a very very fine arrangement a Good example of Soviet central planning and to make all this happen They constructed this this immense grid you can see there the the network This was a 500 KV network big big investment and An example of Soviet attention to to infrastructure now so with the collapse of the Soviet Union Unfortunately for the countries involved this this Centralized planning regime also collapsed the the countries now Rather than getting involved in this summer winter energy exchange they now adopted a and energy independence and Model approach so you can see there that the in 1998 the volume of energy that flowed between these countries 25,000 gigawatt hours That's quite a reasonable figure But by the time it came to 2008 that 25,000 had Almost disappeared to what three three thousand three thousand seven hundred gigawatt hours Traded had largely largely collapsed also the countries the the the The countries that had been connected through this this 500 KV grid that I mentioned which is called the Central Asian power system It's they started to to withdraw from from this system. So Turkmenistan withdrew in 2003 it now is electrically connected with Iran so it's no longer in the in the caps the Central Asian power system and today Tajikistan is Also not connected to caps and indeed is an electric island. It is operating on its own so today instead of a an integrated interconnected Network of five countries you have one is gone and now connected with Iran One is on its own and the remaining three for now Remain interconnected and there is some modest trade between those three three countries I'm giving you this background because this is relevant to the two projects that we will be presenting now the castle 1000 and the to tap Now so in the north we have all this energy rich resources But the story in the south is quite different So in Afghanistan We've got it's a sizable country. It's the size of Texas its population is 40 in the world. It's a it's a substantial country but it's Well yesterday, I spoke about Afghanistan like I can just say that we shouldn't be looking at all the negatives that from 2003 when the When the donors the international community became involved The electrification rate has risen from 7.5 percent in 2003 to 30 percent today and that's a Substantial achievement and we all read Negative stories about the effectiveness of donors in In Afghanistan, but a fact we can be proud of that sizable achievement That's what nearly 10 million people are there about Who have access to electricity? Which did not have before so that's a but nevertheless that leaves 70 percent Which is 20 million who are in darkness and that's a problem So they their energy consumption is low and I'll explain in a briefly in a moment with the plans on on Afghanistan In in Pakistan again, we've got a very significant country 180 million We've got a higher electrification rate of 67 percent 70 percent, but still 30 percent are not electrified and so you have a sizable Population again with no with no supply and indeed the population who do have supply do not get that supply year year round So they have a shortage for those who are connected They had there's a a five five thousand megawatt Capacity shortfall between between supply and and demand so these two countries are in Energy deficit they need supply So there's a great opportunity here to link energy rich countries who have access to These two energy Deficit countries. I think this sums it up there. We've got the four countries energy rich and we've got power poor Pakistan and Afghanistan So the concepts to link central Asia to To South Asia initially those two countries is called Kassarum central Asia South Asia regional electricity market, that's an umbrella concept that that donors are Working on to achieve this connectivity Now we've got two initiatives To Kassarum initiatives. I will speak about the two top initiative and Julie will follow me to speak about the the the Kassar one thousand initiative to tap is an acronym and of course all projects need a name and This project is no different. It's to tap comes from the the the name of the Immediately connected countries Turkmenistan, Uzbekistan, Tajikistan, Afghanistan and Pakistan and This diagram here shows the the how the the three immediately adjacent northern countries will be connected to Afghanistan and how Afghanistan can Can connect to Pakistan I can show you in some detail here now Today in in Afghanistan. You have actually you do not have a grid system you have a a Multi-island network. In fact, you have ten separate electrical Networks Now part of the reason why you have ten separate networks is because the neighboring countries which are supplying power 70% of its energy needs are supplied by imports and They come from Turkmenistan Uzbekistan and Tajikistan and because these countries themselves are no longer interconnected as I mentioned in the previous slides Therefore when they come to Afghanistan, they cannot be just connected together You cannot take electricity from different systems and just pull it together. This is not not possible So this results in different electrical Areas from each of the imports plus then you have local generation in In Afghanistan, they have some hydro resources their capacity their domestic capacity is modest following the 30-year war before the the donors Resumed in the 2000s Maybe about 500 megawatts of which about half is is hydro summer only power and the donors the initial response was to to put in emergency generation and to Construct these import needs being the fastest way to to get to the supply so adb commissioned a study of the Afghan Power sector a master plan study. What should be done in in Afghanistan? So on the right you have The findings of the study it's available on the website For those of you with the energy to read the 1,000 page report you can get all the details of how we go from there to there But I'll try to summarize it for you and say that by 2032 for the The plan is to interconnect all these islands and this is what is done throughout the whole world every utility every country bar Only Afghanistan has adopted this approach Because of economies of scale now you can have bigger power plants which are cheaper per unit and you transmit this to your population so that's the first recommendation of the of the Master plan the master plan has done a demand forecast which identifies that the Afghan demand will increase five-fold from today and After coming after increasing five-fold it will then reach the energy consumption Electric energy consumption per capita of today's India and Pakistan So we're not talking about huge or unrealistic growth. We're talking about Real reasonable expectation for the for the population of Afghanistan and How do you supply that you supplied of course by building? power plants in in Afghanistan, but this will take some time this will take some years and in the meantime While you're building your power plants your coal your gas your hydro power plants all of which are being Developed either by the private sector are under assistance from the donor While you're waiting to build these domestic plants you continue on imports imports will Today, there's 70% of electricity supply and by 2032 imports will have dropped to 33% so that's the now because Just a minor digression here on for the technically minded among you the because the the imports are coming from three separate systems And they can't just simply be added together there is a technical solution and What you do is you convert the import from AC to DC to AC it's called a back-to-back converter and such approaches are Standard practice where a Japan has two systems is different frequency. They have back-to-back converters India's export to Bangladesh is through a back-to-back converter a recently commissioned Converter in Georgia to export to Turkey is true a back-to-back converter and indeed here in America you do not have a Fully interconnected system you have three you have the Eastern interconnect to Western interconnect and Texas and There is a project trace Migos to Interconnect to allow trade between those three networks through a back-to-back converter their proposal is to construct a hub in the north of Afghanistan, which will be a back-to-back converter and The countries will connect here and the output of this will feed to the Afghan system Now so this is all very good and while doing this study and identifying this opportunity it was then that the strategic location of Afghanistan the opportunity for Afghanistan to to benefit and be the Silk Road between Central Asia and Pakistan and use this grid that is being constructed in any case for Afghans domestic need and to use this to wheel par from energy-rich Central Asia to energy poor Pakistan and So that's Which is basically the origins of the two tap concept now where are we at on on this particular project? so here is a map showing the Existing to the situation today in in Afghanistan you have To the left you have supply coming from Iran in The top left you have supply coming from Turkmenistan In the top you have a supply coming from Uzbekistan and top right is the supply coming from Tajikistan Actually of those interconnections the majority Afghans demand today is but three and three and a half thousand gigawatt hours of which maybe about two thousand two hundred is imports of which the Majority is 60% of that is coming from Uzbekistan Which has produced which has resulted in 24 hour electricity in Kabul Today, which is quite an achievement, but there is a Supply gap pending so what's happening? First of all the connection with Turkmenistan Turkmenistan Is very rich in that gas it Separately wishes to does and wishes to expand its gas experts But it also has a policy to use this gas to Convert the gas to electricity and therefore diversify its Exports is energy exports exports its gas by gas and gas by electricity So a line a transmission line from Turkmenistan to the northwest of Afghanistan is today under construction In fact the line to the border in Turkmenistan is completed Existing and the line from the border to the northwest region is been financed by ADB and The bids have been received and the contracts are hoped to be awarded in the next few months Now this year ADB Plans to bring to its board a an extension of the interconnection with Turkmenistan You can see now that the the connection with Turkmenistan in fact continues down to the central hub Pulleys Hummery where we will have this back-to-back converter station that I mentioned and it will include the first back-to-back converter then from Pulleys Hummery down to Kabul which is a is a Is a route passing through Salon Pass quite a famous route and there is a a Line a 500 KV line again a high-capacity line under construction today being being financed again by by Asian Development Bank and then of course Steps to neps in the northern region is called the the north-eastern power system in the south you have the the south-eastern Power system and to connect to Dulce era and that will is planned to be to be processed by ADB for financing next year so in fact by once these contracts are awarded and constructed you will have a high capacity link with Turkmenistan You will have a which is what maybe one thousand megawatts You will have a 400 megawatt link existing with Uzbekistan a 600 megawatt link existing with Tajikistan a 2000 megawatt link from from Pulleys Hummery to to Kabul under construction in fact to tap is not a vision But there's a vision, but it's not a dream. It's in fact under implementation right now by 2018-2019 These three countries will have come to Kabul will have the capacity to supply down to Kabul and indeed for a very modest extension from Kabul To Pakistan 400 kilometers, maybe 200 million dollars You can connect the three countries to to Pakistan. So this is the concept of To tap it's under implementation and That's where we asked this is that's far too much. I guess that's I won't go through that But that is what the that is that that's what the Afghan system will look like in 2032, but I certainly won't go through that with you and How do I click on now? I will now Pass over to Julie who will speak on Casa and then we can wrap up to show how to actually match together Thank you so the the Casa project is something that really takes advantage of a Huge need and a sort of wasted resource and tries to link the two together So I'm sure most people in this room know that energy in Pakistan is a huge crisis I mean, it's a huge opportunity cost for the economy It's also a huge cost in terms of poverty reduction and and sort of dignity for most for many people in the country And so they have a desperate need for generation. The current generation is dependent on extremely expensive fuels So there is also a need to change the fuel mix for for Pakistan And then there's these hydropower assets already existing Which have to release the water because of the downstream needs for irrigation that Jim mentioned But don't generate in the summer because they don't need the power in the summer because they need the power in the winter for heating So the moment there's water passing through dams Which is not which could generate power and isn't generating power in the north and in the south where the peak It demand is in the summer. There's a huge deficit, right? 18 hours a day or you know 10 to 12 hours a day load shedding sometimes more in the summer So basically, you know, you can from the outside in if if if you were a Martian you would say this is a crazy A crazy situation and so what we've done is be those Martians and try and link those things together So that it's quite a simple concept in in conceptually very simple Obviously in terms of implementation much more complicated. So it's about a billion dollars worth of investment split between the four countries and Basically, it's taking I mean you can see the map. It's taking an AC line basically across Kyrgyz Republic into Tajikistan and then Convert doing another one of those conversions DC AC to DC and then a long 750 kilometer transmission line through Afghanistan into Peshawar in Pakistan So it's it's as I said conceptually quite a simple project It's it's about as I said about a billion dollars About half of that financing is coming from the World Bank and that was approved a few months ago by our board and so We started even started the procurement of some of the of some of the infrastructure and the rest of the fine We're working on getting the rest of the financing Well, our clients are working on getting the rest of the financing without help We think it'll start operating in 2018 and I just want to point out what a large amount of power This is it's it's going to be about seven percent of Pakistan's total power consumption But it only in the summer months. So in those summer months, it'll be a much higher percentage So, you know the five terrible hours per year is actually a really large amount of power So we're really I mean, it's really exciting for I think all of our countries to have been able to get this far and To be able to link it into a much larger plan for the whole region is absolutely the vision and you know This is one part of that contribution towards that vision Jim's going to talk now about how this all these two different things linked together But you know, we're just I just wanted to point out that this is a thing that's now ongoing It's not no longer a dream. It's becoming a reality. Thank you There you go, yeah So, thank you Julie now Just a two slides. So it's your patience is appreciated. So this is the schematic all those engineers I'm an engineer like schematics and it shows the Connection from the the existing connections the existing operational connections from Kyrgyz Uzbek it shows the the connection from truck Manistam under construction and It shows the next phase which is true for adb board approval this year feeding into the public harmony hub then connecting down with the connection down to Kabul under construction and the possible connection to Peshawar now there you've got the Casa one thousand and Casa one thousand these two concepts actually are different, right? one is to supply Afghans needs and then the surplus can be exported whereas Casa is a Interregional concept to take advantage of the enormous summer surplus and Largely transmit the majority of that to to Pakistan. So there are two different concepts but they can complement each other and Indeed there is a connection to Kabul From the Casa project which in fact could mean that the connection from Kabul to To Pakistan from Afghanistan can be through that system. So in fact the surplus supply in in Afghanistan can be through the Casa system to to Pakistan Indeed the surplus can be back up to Tajikistan, which is in Winter energy deficit. So there is flexibility between these two two projects So last slide so just to to to emphasize the two concepts are different so Casa maximizes into regional trade it takes the summer surplus and supplies that to Pakistan, which is in Deficit peak peak deficit during its summer period Whereas to tap meets Afghans needs with the opportunity to export that The to export the the surplus can be year-round because of the thermal nature the supply from Turkmenistan The Afghan master plan the 1,000 documents 1,000 major documents I know you will all be reading tonight. It's your homework and this in fact is being updated right now the consultant Fickner Germany which prepared the original document is now revising this document to to To update the generation Forecast to to match in with the supply that can come from Casa and then to to to produce a Updated report World Bank who are or championing the Casa and ADB or championing to tap will then ensure that the two projects are coordinated in terms of technical solution Scheduling so that the timing works and of course the commercial nature because all of these projects are Linked into export prices and import prices and charges. So I think that brings us to an end and thank you Well Jim and Julia, thank you very much for your outline to tap and and Casa these are really exciting projects My colleague Jeff Mankoff and I Just last month and our trip to Kazakhstan Turkmenistan and Uzbekistan In Turkmenistan we had a meeting at the the Ministry of Energy Which is all about power generation and it was very impressive to learn What they had done in the last of 15 or 20 years and what they are planning planning to do And in the context of this project to bring a significantly increase amount of amounts electricity to the border for transmission Across now, let's turn to the Fatima Fatima Sumar as this work is I think intricate to the Obama administration's plans for the region to develop a greater connectivity and regional dependencies and To bring power to the people Thank you so much I'm really thrilled to be here and it's a real honor to be up here with Jim and Julia and I really want to Thanks CSIS for putting on this event because it's so timely with in the wake of the announcements on Afghanistan lately from the president Planning with underway. That's going on in transition issues in Ukraine Which I think also factor into this conversation in terms of energy independent energy independence I wanted to just take a moment before I talk directly about Casa and to tap to put this in a larger political context So folks here understand both the the importance of this work and really the planning for the future That's taking place with countries in this region and the first thing I just wanted to put into context here is there's been so much conversation In terms of the transition in Afghanistan and what the US role is going to look like in this region And I think one of the things with the and there's been a lot of support with from the United States for the Casa Ram Project and the Casa Ram initiative and Casa 1000 and two tap One of the things that you know We are planning on from in the State Department and the Obama administration is really the sense of what this region looks like is a much more interconnected economically dependent region Even with the drawdown and transition in Afghanistan and what's really striking to us is there's such a hunger and need When you talk to governments in this region civil society businesses the private sector for looking at a region That's not just trapped by its geography But that can actually unleash the potential of cooperating more with its neighbors when it looks at greater economic connections And this is really at the heart of what the United States has been promoting in cooperation with countries in the region of our new silk road initiative And it's not just a vision I really want to use the word initiative very carefully here because it's a very carefully thought-out project a series of projects and plans very much developed in Conversation with countries in the region looking at their needs and looking at the kinds of Opportunities that countries are looking towards when it looks at different parts of its geography So that may be a little bit more specific when you look at the region and you look at the countries of Central Asia the five Central Asian countries and that you look at their Neighborhood in terms of their relationship with Afghanistan you look at the neighborhood of Pakistan and then getting down to the Indians of continent traditionally most of the trade and transit routes go east-west and What we are seeing today is not a displacement of those routes. They will continue to dominate the economies They will continue to dominate trade and transit Opportunities but looking for additional opportunities both on the trade transit and energy side that with these new north-south Connections that can really complement what we're seeing in the region This is the least integrated integrated region in the world So we have less than 5% of interregional flows in the Central South Asia region and less than 1% of intra investment flows The challenges for these economies are really great And what we're seeing today is a real desire and push to need to build capacity need to build connections And this is where this collective effort has come in with the international community And I really want to complement the leadership of both the World Bank and the Asian Development Bank that have been helping Really drive a new vision and helping all of us kind of organize around certain projects and areas From in the United States, we have talked a lot about the New Silk Road project Series of projects There's four areas that we are really looking at when you look at the 2014 to 2016 period The first is creating a regional energy market Which is exactly consistent with the presentation Jim and Julie gave today of creating a Casa Ram a South Asia Central Asia regional energy market And I'll come back to that in a moment The second is facilitating trade and transit routes that can really help make the kind of connections that you need in this region That's looking at WTO accession. That's looking at trade cross-border trades and transit agreements the trade infrastructure and architecture It takes so that you can actually streamline The cost of doing business in the region and actually make sure that goods can flow from one across one border to another The third is streamlining customs and borders and here We're really looking at what are the costs of doing business and how do you reduce the costs for truckers that are moving goods across borders? How do you streamline operation operations? How do you actually make sure that you're moving towards this goal of open but secure borders in the regions that you can take Into account both the security concerns which are legitimate that all the states have in terms of securing their borders But not at the expense of facilitating greater transit and trade both of goods and of people and ideas And the fourth is really connecting people to people and expanding market opportunity and market access and here We've really played I think a pivotal role in helping connect businesses across the region We've had monthly trade fairs throughout the region In Islamabad in Mazar-e-Sharif and Kabul in other places where businesses from across the region Kazakh businesses Uzbek businesses Afghan businesses Pakistanis can come together and they sign letters of intent on the spot in one fair in Mazar For instance, we had eight to ten million dollars worth of letters of intent generated during these types of During these types of fairs and it's the first time that you're seeing businesses actually create new kind of markets and opportunities And ways that are very exciting There's already a lot of change that's come about in the region And I think I really want to underscore the point that Jim left us with which is a lot is already happening on the ground So these are not just plans for the next 10 20 years in terms of the planning phase But we're already in project implementation phase And I think there's some real successes that I want to highlight for us to kind of take away first is The average cost of crossing borders in this region. It's it's pretty dramatic It's gone down almost 15% in the last three years and given how difficult border crossings and any of you that have Been to this region know this firsthand can be in this region. That's quite significant If you look at the volume of intra-regional trade, it's increased 49% in the last five years in this in this greater region again a huge accomplishment and the third piece Which is a gym that point that Jim said that I just want to underscore again is looking at rates of electrification Afghanistan alone the fact that you can go from a rate of 5% in 2002 to over 30% today is really quite Significant and shows you that there's something different going on here in terms of the collective effort of Countries and the international community in this region Coming back to the first point on the regional energy market and the Casa two-tap pieces The United States has been very supportive of these projects We've worked very closely with the World Bank with the Asian Development Bank on Casa We made a $15 million announcement of a contribution back in December And we do that because we really do believe that the future of energy trade in this market can be very It can be transformational for the first time in this region You're having conversations if you go to India if you go to Pakistan or governments and private sector companies and energy companies are Actually thinking about how do they tap into their vast energy needs by importing from Energy-rich Central Asia. That's not a conversation You had a year ago or two years ago or five years ago in any kind of serious way And these are the kind of conversations that are taking place today on Casa in particular We've worked very closely With the Casa secretariat which the which USAID has been supporting from for many years now The Casa secretariat has been instrumental in bringing all four Casa countries together Looking at the different project agreements that need to take to place looking at a pretty aggressive deadlines in terms of the Project agreements that have been set out and how countries can meet it One of the things that really strikes me in the kind of work that we're doing on Casa and on two-tap You know when you look at Casa for instance, it's not just a conversation about energy and electricity It's actually a conversation that for the first time in a really significant way brings together the four countries to negotiate To negotiate on a joint future of what that could look like and every series of Monthly discussions that are taking place whether they're taking place by DVC's or VTC's on video or telephone Whether they're taking place in Istanbul or in Washington DC in Ramadi is Building greater trust between the four negotiating parties between the four countries Getting to know each other getting to know different negotiation styles cultural styles and really exploring what the possibilities are in terms of this And I think for all of us in this room and throughout that have been working on these projects What's really struck us is that this is bigger than electricity. It's bigger than energy It's about it's about actually looking at ways that these countries that have never really worked together and any kind of Fundamental projects as complicated as these are and I will underscore how complicated these projects are progress is not necessarily linear You make progress on some project agreements, and then you move backwards on pricing or on something, you know another issue But the idea is moving and working towards something. That's a collective goal Now to get to the to get to the finish line on both these projects I think there's a lot of things that need to happen that I wanted to just lay out here today The first and I'm actually I can't underscore how Thrilled we are to a not just do this presentation up here collectively today But for the real work that has taken place within the World Bank and the ADB to work together towards Complementarity of these projects because too often In complex areas where we work in Afghanistan and Pakistan and elsewhere big donors can come in get very wrapped up in their own projects and Fail to see the bigger project of how this leaves behind a broader legacy for these countries who then have to deal with the consequences for Their energy markets for their pricing and for other issues But there's a real commitment underway from both banks to work towards joint Complementarity on these projects to make sure that these projects are working in tandem Both for eventually bringing energy flows into Pakistan But also in terms of the broader Afghanistan national energy plan Which is very significant in terms of the investments from the donor community over the past decade or so another challenge to look at is Domestic energy needs in each of these countries including in Central Asia You know Central Asia like even like its counterparts in Afghanistan and Pakistan even though it has significant energy Potential in terms of export has a significant domestic energy challenges as well This is a grid that needs significant upgrades modernization that has lagged behind in many ways since the collapse of the former Soviet Union You have brownouts that occur daily in some places With the winter energy crises in places like Kyrgyzstan and Tajikistan is quite severe And so as we work as we work towards these types of projects that can really explore What export markets can look like to build up generation and revenue capacities in the Central Asian countries It also needs to be done in a way that really looks at domestic energy issues within these countries as well, and I'm very pleased about the World Bank and the adb have significant in investments and Conversations that are underway right now to look at the domestic energy needs in these countries And that's and that's an area of real focus. I think for the United States and other countries Another challenge of course is the geo the geopolitics of the region in terms of this is one of the Most exciting regions in the world if you look at its neighborhood if you look at the Russians the Chinese the Iranians Of course the security situation in Afghanistan And so there'll be significant geopolitical issues that will need to be worked out so that all countries Understand what their roles and responsibilities are to support these types of energy markets and grids It's creating a new type of momentum, which can be challenging at times for these countries to negotiate and to handle One of the things that we have been working towards and from the Obama administration and the State Department has been really being as Transparent as possible in terms of both the New Silk Road Initiative and the kind of work we're doing but also in the conversations We're having the region with what it's going to take for these countries to really Match up their energy grids and making sure that for those countries that do have concerns about what this means in terms of export potential for what countries that have concerns about Resource water sharing transboundary water issues, which are another challenge for this region That these concerns are being addressed in a way that are transparent and that bring countries together The last thing we want to do is exacerbate regional tensions, especially over water sharing issues Which can be very very politically difficult in this region and so it has to be done in a way that Mac that maximizes the pie for all the countries in the region whether or not they're direct Participants of these of these projects And the last thing I just want to end with is that there's a real I think sense of moment of opportunity here as we think about What is happening in this region and one of the things that really strikes me? I've been on the road, you know about seven ten days a month on a lot of these types of issues throughout Central Asia and South Asia You know the conversations we're having here now in the Central Asia side If I had a connect are actually building momentum on the South Asia side So I was just an India and Bangladesh for instance And there's this renewed sense of urgency momentum even in the South Asia context on energy Energy security and how to build regional energy grids and they're looking to see what's happening here And you know, it's I think we are all kind of struck We were in India we've been in India our teams over the last few months and Folks that are talking about Casa one thousand and thinking about hey Can we be part of that or can is there a way for us to be getting energy as well from Central Asia? Whether it's TAPI what whether it's gas whether it's electricity. What are the different ways of doing that? What should we be doing here in the central in the South Asia context to also create our own regional energy grid that one day Could connect what would it take to build the lines between India and Pakistan for these conversations to happen and really connect up Into Central Asia as well. So it's a moment of real opportunity The window does not necessarily last indefinitely. And so there is a sense of urgency for all the countries to really work together finalize Pricing deals finalize the commercial and project agreements Take the steps to show ongoing momentum to build confidence within the donor community and Show that there's something really happening here But I think we're you know, we're really sees with a sense of opportunity of excitement that there's some real cooperation and a Sense of a sense of real opportunity here if all these different pieces come together. Thanks That was super. I am really excited about this and I'll tell you why I'll put it a little bit of historical context hearing about the the collaboration going on between the World Bank and the Asian Development Bank and Especially how the Obama administration has taken leadership on the new Silk Road initiative and developing not just developing but actually Getting to the finish line on some concrete projects, which are going to read leave a real legacy in the region And a unique legacy in the region. I don't need to tell everybody that of course You know the end of 20 2014 our troop presence we are in principle no longer to be fighting in Afghanistan advising and training instead and We know the president announced that a full troop departure by by 2016 but You know for an old sovietologist like me Who one of the first things you learned about what is soviet power? Socialism plus electrification of the countryside. I mean electrification of the country is just so fundamentally important for any any state that could just can it cannot be overestimated and possible to over overestimate and The Obama administration has come a long way on this road and in this in this area And they really deserve Commendation for this. I know the administration has been getting beaten up on a number of issues Ukraine I've done some of the beating up with myself on that on that issue But I think here there's something really important to note if you go back to The debate back in the fall of 2009 I talked a little bit about this yesterday I'm going to talk about it a little bit more in a pointed way today the debate about Afghanistan and American engagement in Afghanistan in 2009 At that time I was following it very closely because we were working on a project here at CSIS that looked at the Challenges and the opportunities of the northern distribution network how we supply our troops in theater with non-lethal non-lethal supplies Really really interesting project, which kind of led us to thinking about a regional economic cooperation strategy for Afghanistan But at that time the debate was it was so narrow. It was pretty much all about counterinsurgency or counterterrorism how many troops That was about it and I the first question I asked myself was you know Whatever success that we with our allies the Afghans have on the battlefield if there's not economic development and economic sustainability it's going to fall apart and and then to look into well how much thinking had been going on since 2001 about on our side about this piece about an economic strategy for Afghanistan and It was almost criminal how little strategic thinking had been done I think in 2009 2010. I got a document that had been produced by the State Department About Afghan an app economic strategy for Afghanistan And I looked at it about four pages It was a list It was a list. It was a list of you know 26 27 good things. They're all good things But there's no prioritization there was no sense of how these work together And even when the There there was some debate about an economic strategy. It was typically well, we should focus on agriculture No, we should focus more on the mineral and energy well of Afghanistan and and The wise rabbi both things are good I mean Afghanistan has to have both of these areas of their economy developed in very in very big ways But then another piece that was not was not thought of that much at the time was well How do these if these products Whatever they are if they're not able to get to get to markets. They don't have value They don't have value So you have to think about the transit piece of this How how do they get to other places in Afghanistan and then even more importantly? How do they get to places outside of Afghanistan and inside of Afghanistan and Then you think well have the Afghans been thinking about this Absolutely the Afghans have been thinking about this you could go back and look at the first Afghan national development strategies I think the first draft produced in 2000 2006 and it was very clear that this was a high priority for them Why? because If there's greater trade investment transit connectivity of Afghanistan with its neighbors You essentially create mutual dependencies And you give countries an investment in Afghanistan's successful development and Prosperity both sides benefit It's sort of obvious But it's not something that was you know given given a lot of focus in in in our thinking about about a strategy and So at the time myself and some others here at CSIS and Fred star over at Sice catchy We had produced a report that came out in Just before the cobble conference in 2010 Sorry, I'm repeating a little bit a little bit of this from yesterday, but these presentations got me excited I think I think what's going on is really important And it was a modestly titled a modern silk road strategy the key to success in Afghanistan and it And to see some of these projects like tappy that we talked about yesterday and to see Casa 1000 or Casa round and now Our newer project a to tap That are actually moving moving ahead, you know We'll see about a tappy, but a positive sign we heard about yesterday was that Bangladesh wants to join Wants to join the project. They've submitted an application. They're negotiating with Turkmenistan. So maybe it'll be called Tapeeb if it if it gets if it gets done But there's so there's been a tremendous amount of progress real progress that's been done And I think in particular to the when I look at the what the Obama administration is doing when kind of the evolution of the new silk road Was called a vision. I was disappointed at that time because well, you know when Secretary Clinton talked about this in Chennai in July of 2011 that was great. Okay, someone's taking it They're only calling it a vision They call it a strategy or they call it an initiative and sounds like they're really a little more committed to it And so to hear Fatima today talk about it in terms of an initiative that that to me is It indicates the reality that things are getting concretely done And having an impact on the ground. I mean that is what is going to win the hearts and minds of People and just a last comment before I ask a couple of questions of the panelists You know to put this, you know even broader geopolitical Context We've that we've been working on here at CSIS we call reconnecting of Eurasia We have made a big presentation at the November Global security form here about that it's up on the website if I'm interested. We're happy to point you in that in that direction But I mean one of the reasons why I got so interested in this kind of before the Northern distribution network project and all of that six years ago was seeing this graphic of satellite a Satellite graphic of telecommunications activity around the world who had been classified was done in 1999 And it was sort of we sort of looked at that as a as a metaphor for human activity and connectivity And if you go around the entire northern hemisphere, it's black With the exception of one spot the black meaning that there's a lot of activity going on and That one fairly empty spot. Well, guess where it is Right here as bottom was saying one of the least Integrated regions of the world amongst themselves. I Mean, it's it's extraordinary that Jeff and I were just traveling in Central Asia last month Well, now it's no it's in April six weeks ago And we had to we had to fly or we wanted to fly for example from from Tashkent to Ashkabot and There are no direct flights between Tashkent and Ashkabot But are you kidding really two capitals within Central Asia? I mean so the I mean this is sort of indicative of the degree to which Central Asia Central Asian states Over the course of the last 20 plus years since the collapse of the Soviet Union as you know Jim illustrated in his slide about how the Central Asian power system had kind of collapsed this integrated system there and there are all indicators across the board about how a Cooperation and integration had fallen off and it in really a sense of regional identity. I really kind of fallen has fallen off and There are a number of areas where it actually makes sense. It makes commercial sense. It makes Technical sense it makes political sense for there to be more cooperation And so kind of bringing this back to the point that Fada was making that projects like this are are Essentially building enhancing patterns of cooperation within a region between regions in which they didn't really exist and Within regions in which there's been tremendous distrust tremendous distrust And as we know talked about yesterday with the TAPI TAPI pipeline that you think of what this Not only what this project could do for energy supply From Turkmenistan to Afghanistan Pakistan and India, but even potentially more importantly for the stabilization of Afghanistan Political reconciliation between Afghanistan and Pakistan Political reconciliation between India and and Pakistan small steps in that direction. I mean this is a reason why I am personally very excited to see this this happening and And it it puts this region with this big continent Eurasia. It is reconnecting You know with transit lines, you know from east to west and north north and south diagonally I mean they're happening as we speak they have been happening. It's of tremendous importance But for the prosperity of these countries and that have been relatively disconnected for their prosperity For their stability for their for the conflict reduction things like this are absolutely essential. So Congratulations to the administration the two banks the institutions for the work that's been done But you know what you got a lot more to do Two quick questions before I put it up to the audience One I wanted to ask about Iran Iran I saw on the slides is still his power is providing Electricity to Western parts of Afghanistan Is Iran or could Iran can be considered as part of this integrated To tap could we be talking about I to tap or to tap me or something like that in the future and the second question Get set you could Talk a little bit more about the commercial viability of the projects because If they're not commercially commercially viable then that's probably gonna torpedo them in the long term So you can help make that case that would be a lot of value at it. Thanks Anybody maybe I'll take some adults and pass over to Julie On Iran actually Iran is a net importer of electricity Turkmenistan With roofing caps Operates synchronously now. It's an interconnected Interconnected with the Iranian system big system and it exports to its to Iran Iran is Turkmenistan's mean electricity client at this moment Even though there is some supply from Iran to the west of Afghanistan her at it is small and in terms of Iran being a major electricity supplier to Afghanistan, this is not expected in the near future the commercial Projects Certainly been Julie should should pick up on Casa, I guess to to to that question as far as as far as to tap is concerned the the the import Contracts Of course are the the commercial Agreements are covered by import contracts by power purchase and sales agreements so for example between Tajikistan and Afghanistan line which was financed by Asian Development Bank. That's covered by a 20-year PPA the Ozbek to Afghanistan is an annually agreed PPA and that has been going on for the last nearly decade now and the agreement between Turkmenistan and Afghanistan is at an advanced stage the the power purchase and sales agreement ADB is the secretariat in facilitating the negotiations and there've been a number of rounds of negotiations and We expect in fact the next weeks to assist the countries in concluding that so that would cover the direct bilateral agreements When it would come to the wheeling the power through to Pakistan Which is a future Development at that stage of course Afghanistan would be in the an opportunity to take value from its infrastructure and But that's a future stage, but maybe Julie could could I guess have have comments to add on to commercial side of Casa Just to say that Casa has an extremely high Financial and economic rate of return We the first one we first got the estimates back. We didn't believe them We then made the most conservative, you know ran it through the most conservative assumptions the most negative Scenarios and it was robust. I mean one of the things that strikes me is that they're all commercial agreements that actually govern how both how these projects work and so in the Casa situation you have a situation in Kyrgyzstan and Tajikas and where Tajikas On for instance is literally spilling water Right now during its peak summer months where it's getting zero cents per kilowatt hour because it's spilling water if If these four countries are able to come to agreement on the pricing for instance You have a situation where not only what would Kyrgyzstan sell at a higher rate What you know depending on whatever those that that negotiation comes to but Afghanistan also benefits because it now generates revenue Annually from the trend acting as a transit country for Pakistan Pakistan is able to import clean energy at a price. That's competitive and cheaper than what it's getting right now on some of its domestic Production and so you have a scenario by once you have the investments from the adb the World Bank The United States other donors Islamic Development Bank, which has also been a very important partner with the World Bank and other donors that are looking at putting money into the The pieces of this project They're sustaining because they're commercial agreements and that's why these countries ultimately it's not just about the geopolitics It's not just about Self-interest it's because they're gonna make money off the deal or they're gonna be importing at clean energy At a competitive rate where they're actually able to do that. And so it's actually an economically very Attractive package. I think if you're able to get the different geopolitical pieces together to do Making money is good Okay, please Call on you identify yourself and one question comment, please per person Grant Smith Central Asia caucus systems to afford formerly with the State Department in Turk in Tajikistan and before that in Central South Asia I have a quick comment and a question the quick comment is that Certainly when I was in Tajikistan, I recognize the importance of this kind of a project Not only giving Tajikistan an opportunity to export its power, but also Mr. Liston you commented on the Interconnection between Turkmenistan and Tajikistan to provide power in the winter, which would be very important for the people of Tajikistan And gets away from the issues in the Tajikistan Uzbekistan relationship So it has an additional importance there. And I also noted that there was no mention of the contentious Rogun hydroelectric project My my question concerns the experience that The bank the two banks have had in doing major infrastructure projects in major energy infrastructure projects in Afghanistan in the time of security problems Which is certainly going to be a determinant in whether this can go forward or not Has had these projects Successfully gone ahead Has it been necessary or possible to get local regional powers Within Afghanistan a sense of buy-in for the project that they are benefiting from it and I say this In my background in Tajikistan in the late 80s late 90s excuse me when we noted that narcotics trafficking continued in spite of Very difficult situations within Afghanistan and our theory was that the people there always saw it Well war is war but business is business and the traffic can continue Can you persuade people to have that kind of an approach to major infrastructure projects as well? Okay, since Grant did mention the our word Rogun Dan I was wondering if you could also just highlight that part of the question Jeff and I were in the three downstream countries Kazakhstan, Turkmenistan, Uzbekistan and of course We heard a lot about about it And I was wondering if you in addition to his question Could you address kind of your perspective on on that issue? Thanks Well, I can deal with some of the issues on the the the Afghan infrastructure and the regional buying on on Rogun, I think maybe that might be a World Bank common to who is currently Working on on that that project ADB has financed a number of projects in in Afghanistan, which I've mentioned earlier on and Some years ago it was more difficult to receive bids from consultants and contractors We did get bids. We did get we did award contracts. We there are consultants working there, but the range of Bids was was low that has actually Improved improved substantially. There are more more consultants more more contractors I mentioned the the interconnection with Turkmenistan that bids are under evaluation right now Indeed the client has concluded their Evaluation is sent to ADB for our no objection and we're very pleased to see a a long list of Contractors who are who are interested in in working. That's one stage of the of the The project the next stage and of course is do the project stay standing Have they being attacked and the answer is a very clear no that I'm contrary to all expectations you might have otherwise the The thirsts the demand from the population for electricity is is Unbelievable Or maybe you could believe it if you were in a country with no electricity and you could imagine what life is like so the population want this so much and You know there have been no Experiences of sabotage with any of the existing assets that we've put up and touch with yeah And so all indications are good in in that regard Regarding regional buy-in ADB did conduct a Study also on our website also thousand pages again when you finished the first master plan and it's a very interesting report which shows that if the let's say the four at the stage only Four countries involved in the four central Asian republics Reengaged in energy trade if they went back to what they were doing in during the Soviet era that the Savings Paramum where RSR calculators at 1.6 billion US dollars So it sounds good Now But the savings are not evenly distributed there are winners and there are losers and the losers actually are not so keen and in fact This is not an irrational approach that when you look at the experience throughout the world including here in us Losers do not like to join in in in regional Experiences even if the overall Result is is a win There is also the issue of energy security so if you're to jikestown and you You are in winter energy deficit and you're dependent on supply from your neighbors that weakens your your position and Countries are worried about that and it's not only Central Asia again. This is every country in the world views energy security as a top issue so ADB believes that once countries achieve some Level of energy security when they become confident with their with their own energy Then they will get involved in energy trade. So this is our experience that that countries first want to protect their their Sovereignty and and then take advantage from energy trade So that's the step that we're we're seeing. Thank you Okay, well, I'm glad I got the easy question So whatever happens with Rogan Casa will not take power from Rogan, that's that's the simple answer I'm the South Asia person. So I'm not going to talk about Rogan itself. I would second What Jim was saying about the security issues and also to say that The the project builds in a huge amount of the community benefit what we call community benefit sharing because The days of power systems, you know going over the head of local people and providing no benefits to those local people are over So we've got huge investments in making sure that there is very specific local area development in the line in the areas Where the lines will be going and the Afghan government has shown huge support for For the Casa project Consistently so I think the idea of you know, it being a major transit country is very appealing to it above and beyond The financial rewards that it will get from being involved in the project Hi, my name is Melissa Crawford, and I'm a wringle fellow with the Senate Committee on Foreign Relations And I had a question about Turkey and whether Turkey has expressed any interest in joining This particular or being involved with this particular initiative at all I know that it's been a little bit blocked out from the EU Also the Middle East and some people see Turkey with its linguistic ties to Central Asia is kind of being One of the best or even last resort for them to grow their economy And I was so you talked about India a little bit and how they were interested in joining this initiative somehow This Turkey come in at all with this. Thank you actually Turkmenistan exports to Armenia and on to Turkey Via Iran They use the they have a a commercial agreement with Iran to wheel. I mean actually how it works is that they supply the Eastern part of Iran and the Western part of Iran supplies to Turkey. So there is some Central Asia to Turkey trade or to the West trade But it's it's it's limited. It's it's not the focus of this particular initiative We're looking more north-south, but it There is from Central Asia from Turkmenistan via Iran and also in the West West Central Asia if you could or think it's such a term the caucuses and Georgia, which I mentioned also a native country Hydro rich and It is Exporting to to Turkey via a HVDC back-to-back come worker station for your information. Thank you Yeah, they've also expressed interest in in the CASA project. So that's under discussion Well, and I think if we if we put it in a somewhat a somewhat broader perspective in thinking about I mean Turkey has been a big supporter of a regional economic cooperation strategy for Afghanistan and the Wrecker process they the regional economic cooperation conference For Afghanistan meetings. I attended one of them in 2010 In Istanbul, of course, we have the Istanbul process. So in Turkey Understanding well because it is a transit state itself has further aspirations of being a transit hub has ethnic religious Cultural connections and interests in Central Asia, you know for all of these reasons. I think they are Big in supporting this in principle and various various pieces of it Yeah Good morning. I'm now boring mama from the voice of America Enjoying listening to all of you Fatima Sumar you sound very optimistic. It's great to fill your energy But when we talk to the people in the region to the folks to the officials in the region They're not as optimistic. I mean the this government has been talking about the Silk Road vision now Silk Road initiative and Casa and other projects for a long time But do you really see a real progress in terms of how these governments are now approaching these? Projects because I mean do you see any? Collaboration between the countries of Central Asia are they Discussing this issue as actively as Washington is discussing for example because when we look at state media We hardly see any reports about them. I mean the the names of these projects pop up when US officials visit the region unfortunately So if you could answer that So, you know one of the reasons why I personally am so optimistic about this is when you think about the New Silk Road initiative from the United States, it's not a us-driven initiative in the sense of Us telling countries in the region what they're going to do what they're going to work on actually it's the opposite of that We are taking our cues in our direction from the conversations We have governments with civil society with with the private sector with the international community Donors about what the possibilities are and where governments are interested actually using political capital and doing things And so if you look at the four different pillars that I identified in my remarks in each of these areas There are different areas where you've seen real collaboration and partnership and those are the areas we're pursuing So I'll give you a couple of examples Obviously on the regional energy side with Casa you have for the first time Ongoing active discussions between the governments of Tajikistan Kyrgyzstan Afghanistan and Pakistan that was not happening In the recent past and for the first time you see this you see this monthly You see this weekly the phone calls the the meetings the the schedules all over all over to the world to look at How to reach the next stage of deals on pricing on the commercial agreements and to move the project forward When you look at the trade and transit side, there are ongoing conversations that are happening in the region on cross-border trade agreements For instance, so if you look at the Kyrgyzstan Afghanistan Tajikistan Frame there in terms of the different cross-border agreements that are there There's the the CBTA currently in the parliament in Bishkek for instance Which is awaiting ratification that would really improve cross-border trade and transit in this region These are ongoing conversation between these governments of the region if you look at the work That's being done on customs and borders for instance to strengthen the border points in Afghanistan's checkpoints and in Streamline trade and transit conversations for the first time with US support for instance you have Training in Tajikistan where we're bringing Afghan customs and borders officials to Tajikistan to look at cross-border security and training cooperation You have officials from Uzbekistan Tajikistan and Afghanistan meeting on various projects and in ways whether it's through the US programs OSE programs or EU border security programs If you look at the the people to people pillar I mentioned it is remarkable to look at the network of Women entrepreneurs that for the first time has been created linking Central Asian women entrepreneurs and South Asian women entrepreneurs And for the first time you have Networks of women in each of these countries who not only are connected to each other But are giving via SMS text email support on a daily basis support Advice and guidance to their counterparts in different countries about how to break through what can be very difficult investment climates How to get access to capital how to start a new business how to grow an SME into a much broader business and sector It is remarkable to me in every single one of these areas how much is happening every single day And how much is not being captured by media in general because the conversation the lens tends to be very negative on the challenges and the problems And yet the opportunities and what what the success stories that we've had have been so remarkable in each of these areas when you look at Conversations on WTO for instance, which is really you know You think a lot about the investments that have to be made on the infrastructure side I'm sure you need to build roads and bridges and tunnels and the physical infrastructure But at the end of the day Without the soft infrastructure without the regulatory infrastructure that would complement that the truck is still whether the road is there or not It's not able to cross that border and not able to move when you look at the statistics I mentioned in the earlier part of my remarks about Interregional trade and the border crossing times decreasing in such a significant way Those are real success stories that doesn't happen because the United States comes in that happens because there's real cooperation and movement Amongst the governments in the region to streamline their procedures and to work together What what I think is striking of what's happening is of course There's gonna be progress in areas where governments see a real self-interest and it's in their own national interest And they feel that they're it's not at a Cost to them in terms of their own national security to make these kind of connections and make these kinds of projects real Where where governments are not interested you're not going to see them necessarily part of those projects or part of those collaborations So it's not It's not a situation where you need all five central Asian countries on all five projects for instance Another area which is which I really want to stress and you know We mentioned this in the energy context because it's so important It's just water management and water sharing issues in these countries and the types of Conversations that really have in collaborations that have to take place on trans boundary water management issues And if you look at the work that's even being done In this context of countries coming together for the first time you have with through the UN auspices For instance conversations in Vienna and in other places where all five central Asian countries are Coming to the table to talk about how to do water sharing agreements that was not happening for so many years So there is a real sense. I think In certain sectors in certain areas of where of where movement needs to happen now again I want to underscore and emphasize that this is one of the hardest Regions in the world to work when you when it comes to inter-regional connections for all the many reasons that we've laid out Earlier in our presentations today progress is not necessarily linear It's going to take time. These are generational challenges in many ways and so there's no quick wins here in terms of Looking at two years from now. What can we say? We've accomplished in turn and then and then pulling away This is going to be a long-term commitment a long-term partnership from the United States and from other countries and working Not just with governments But with people of the region and civil society and strengthening those capacities so that you have a real long-term generational solution to a lot of these challenges Just to add to that because I see I see tremendous progress in thinking about this and that they're countries Are increasingly thinking of their role as transit hubs a country like Turkmenistan for example I mean traditionally quite closed isolated or seemingly seemingly to us There are tremendous things afoot and how they are thinking about themselves not just thinking about themselves as a transit hub But actually doing things for example a new railroad that's being built Linking Kazakh the Western Kazakhstan Turkmenistan and Iran. It's nearly it's nearly completed This is an important project for these states to be able to have access to To to the Persian Gulf and to into and to see trade essential for landlocked landlocked countries Like them and there are lots of things things like that. So it's and it's so it's you know What in a way? I think it's like the United States has joined in with What is just a growing momentum of? Connectivity and the importance of connectivity and people understanding that you know our Prosperity is going to depend to a considerable extent on our being connected in these larger Energy Transit trade routes etc. And they will they will lose they will lose out. They'll they will lose out lose out badly It's and it's not a and is not a short-term progress a prop process and the biggest obstacle as a father was saying You know, it's not the lack of physical infrastructure. That's a problem. It's not the security issue It's basically the the long-standing problem of borders acting as toll booths And stopping it, you know C trade is is so dominant because it's very very very very predictable The problem with transcontinental or land land trade is that is the unpredictability of When the product's going to arise and just what the cost will be incurred as it has to cross several borders so I think that that The data point that Fatima brought, you know a regional 15% drop in the time Which it takes to cross borders is really really significant But it takes tremendous effort on all fronts over a long period of time to push that back because what you're basically fighting against are our politics and interest groups Which are not necessarily acting In the interest of what one might conceive of as the national interest so to speak Hi, my name is David Keith and I'm with tetra tech and I'm gonna pose this to you Julia Because you said you're the South Asia person First I want to compliment everybody This is just fantastic to see Casa Ram to tap and Casa 1,000 all on the same panel all on the same page This is like a dream come true for those of us who've worked in this region in the energy sector for as long as I have the one thing I haven't heard anybody talk about really is the demand side and that's Pakistan and I think we those of us who are working there know that Pakistan has a Tremendous circular debt problem in its energy sector and I was wondering if maybe Julia might address What sort of credit enhancement and that sort of thing that would make these projects actually fly? Well So so we have a comprehensive set of things we're trying to do in Pakistan to help Oh, I have the government's request to help them deal with the energy crisis And we actually have the country director for Pakistan in the room So I will ask him to compliment what I'm saying if you have any additional questions But we have so we have a combination of things with the sort of underpinning is a what we call a policy loan So we're working with With the government on various policy reforms, which then we can finance Some of the government's spending Once those reforms are completed and we have a series of those policy loans ongoing the first ones already completed and Circular debt as you can imagine is a very very serious part of that Of that policy dialogue But then we also have some public investment and significant private investment to bring down the average cost of power because right now as I said at the beginning they're highly dependent on in very expensive imported fuel and So if we can develop some of the hydropower projects that brings down the average cost of power dramatically in addition Working at some of the inefficiencies and the tariff the tariff setting and the tariff So the inefficiencies in the system the losses the tariff structure and the collections And also a lot of issues on governance and transparency Yeah, I mean it's clearly there's multiple problems But but we also know from a political economy point of view you can't fix Any power system or any utility system just by putting up the price and increasing collections if the service is poor People's willingness to pay is not is not good So one has to work in tandem improving trust in the system improving reliability of the system and improving the cost recovery of the system And do you want to add anything? Hi, Gary Sargent. I run a small little consulting firm called Threadstone light. I'm a as a retired army special forces guy I'm a little disturbed by the counterinsurgency piece So I just want to make one thing clear because he mentioned it that we don't do counterinsurgency anymore counterinsurgency entails the whole Well, I but but anyways, so I'll leave that alone but what I would like to sort of hear about from the panel is Energy production in Afghanistan thoughts on that because I heard the word coal earlier and that sort of Disturbs me to hear that as one of the generation things we're going to use in Afghanistan. So Yeah, thank you Afghanistan today has hydro and diesel that's it's about 500 megawatts But half and half it's hydro is summer only seasonal It's peak demands in winter diesel is expensive population cannot afford it the resources available to Afghanistan to build its own domestic generation are coal gas and hydro And I'm aware that World Bank is assisting in Kunar, which is a significant major hydro project ADB is assisting along with USAID in gas gas generation Chevrolet and the gas gas generation I guess that can be counted as clean coal associated with the INAC copper Mine concession because Afghanistan is also mirror rich. This is one of its opportunities to to grow iron ore copper gems Rare earth metals. So naturally it wants to develop that and so it has a concession a private concession Chinese consortium who are developing the INAC copper mine and associated with that they will need In-house captive supply and They are exporting that is a cold plant and a thermal plant so Afghanistan is Needs a dispatchable plant to meet its its its winter demand and it is uncomfortable to Continue its high level of dependency on imports for perfectly reasonable and understandable Reasons it wishes to decrease that so it wishes to build its own its own supply and it is doing that True to the private sector as as best as it can So I guess that's your question Just a verification. It's nagloo. We're financing the rehabilitation of nagloo in Afghanistan Kunar is just at the water sharing water analysis stage. So we're not doing any and I Should have said in my answer about Pakistan that this is another case where The ADB and the World Bank are completely in lockstep I mean they never they never I mean they finish each other sentences the two team members And they never go to a meeting without each other and haven't since the beginning. It's been the most the closest Corporation I think I've ever seen so I just forgot to mention that thanks It's a really important point though I think just what Jim was saying in reference to to INAC or we decided the same would apply to the Haji kak Some of the huge mineral resource basins in Afghanistan There's They will never get developed unless you have power delivered there to start to start things And then obviously you also have to have railroad there as well to export export it out You can't do it economically with trucks And so these are also pieces of plans of various various other projects for the development of Afghanistan and it's inter interconnectivity I think we may have time for one last question or comment before we wrap things up But it looks like everyone is fully satiated with all of the information today So let me Before I thank everybody let me make an advertisement because next week We will be hosting a related discussion to In ways to do Eurasian cooperation and development here on on June 11th, and this will be the discussion will be on multilateral security and development challenges in Asia and what is the role for SICA the conference on Interaction and confidence building in Asia And this institution just held their Last most recent their fourth summit meeting a couple of weeks ago and in Shanghai We have a terrific program for that on June 11th on on the morning. Unfortunately, I will not be there because Jeff mankoff and I will be taking off tonight for Baku To Blesi and Yerevan, so I'm very happy to get this data point Jim about the the Turkmen Armenian Iran-Turkey connection, but let me thank Julia and Jim for pinch hitting brilliantly today in our discussion of to tap and Casa 1000 and large and special thanks to Fatima for Bringing the administration's perspective on these projects and what the US government is doing to help help advance them and I can just wish you all personally continued success and look forward to gathering in the next Months and years and hearing how the progress has has been further. Thank you all for coming