Tashkent, Uzbekistan (UzDaily.com) -- The World Bank has decided to resume funding for the Central Asia-South Asia Electricity Transmission and Trade Project (CASA-1000). This USUS$1.2 billion regional power initiative aims to enhance connectivity benefits for the Kyrgyz Republic, Tajikistan, Afghanistan, and Pakistan.

The project plays a crucial role in combating climate change by promoting the development and use of clean renewable hydropower. It is expected to bolster the energy sector in all four countries, providing improved and sustainable access to energy for both individuals and businesses. The World Bank Board approved the CASA-1000 project in March 2014, backed by financing from the International Development Association (IDA).

Despite a pause in the Afghanistan segment of the CASA-1000 project due to the political situation in August 2021, progress has been made in Kyrgyz Republic, Tajikistan, and Pakistan, where construction activities are nearing completion. The Afghanistan portion is vital as the key inter-linking country, and its completion is necessary to avoid significant economic and financial losses for the involved countries.

Facing challenges in bringing in private financing for the Afghanistan activities, CASA countries have sought the World Bank's assistance in resuming the project. The World Bank has decided to resume CASA-1000 in a ring-fenced manner, ensuring that all construction payments and future revenue are managed outside of Afghanistan, excluding interim Taliban administration (ITA) systems.

The resumption will occur in two phases: a three-year construction phase and subsequent operations. During both phases, all payments will remain off-budget, outside of ITA control, and offshore. The existing uncommitted balance of US$110 million from the paused 2021 project will be utilized, with no new IDA resources anticipated for completing Afghanistan's project activities.

The World Bank will make payments directly to the offshore accounts of international contractors and consultants during the construction phase. For the operations phase, Offshore Account Bank arrangements in Abu Dhabi will ensure that payments and revenue are ring-fenced offshore as per commercial contractual agreements. This includes provisions for the purchase of electricity from Tajikistan and Kyrgyz Republic under the CASA-1000 and other existing power purchase agreements.