A staff member attends to hospital patients in Kabul. A lack of electricity is one of the factors contributing to a crisis for health care in Afghanistan, the World Health Organisation says. Anadolu Agency via Getty Images
A staff member attends to hospital patients in Kabul. A lack of electricity is one of the factors contributing to a crisis for health care in Afghanistan, the World Health Organisation says. Anadolu Agency via Getty Images
A staff member attends to hospital patients in Kabul. A lack of electricity is one of the factors contributing to a crisis for health care in Afghanistan, the World Health Organisation says. Anadolu Agency via Getty Images
A staff member attends to hospital patients in Kabul. A lack of electricity is one of the factors contributing to a crisis for health care in Afghanistan, the World Health Organisation says. Anadolu A

Afghanistan's power dependency takes its toll on hospitals


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Doctors in northern Afghanistan are struggling to cope with more frequent power cuts this winter that have highlighted the country’s dependence on electricity supply from Central Asian states.

The electricity board, Da Afghanistan Breshna Sherkat (Dabs), says it gives priority to hospitals at times of reduced power supply, but doctors in two northern provinces said extended power cuts last week severely affected services despite having backup generators.

“On Wednesday, we didn’t have power the whole day. Then on Thursday, we had about 10 hours of power. But today again we haven’t had power all day,” a doctor at a private hospital in Mazar-i-Sharif, the capital of Balkh province, told The National.

“We are managing the problem by using the hospital generator. However, we can’t use a lot of equipment on generator at the same time, so we have to decide which emergency is more important.

“Also, fuel has been getting expensive and it is not an affordable method of running a hospital. Unless the power issue is resolved soon, we will not be able to continue like this. And I am aware other hospitals are suffering similarly.”

The doctor, who has not been identified for his safety, said there were more power cuts than usual this year.

“We hardly faced any power cuts in Mazar. Yes, in wintertime there were shortages, but not like this. The most we would lose power in previous winters was for 30 minutes to an hour a day.”

Pylons carrying electricity from Uzbekistan to Afghanistan on the outskirts of Mazar-i-Sharif in Balkh province. AFP
Pylons carrying electricity from Uzbekistan to Afghanistan on the outskirts of Mazar-i-Sharif in Balkh province. AFP

Afghanistan relies on power from Uzbekistan, Tajikistan, Turkmenistan and Iran for nearly 80 per cent of the 1,600 megawatts it requires. The remainder comes from domestic sources such as hydroelectric dams, fossil-fuel power plants and solar energy, says Mohsin Amin, an Afghan policy analyst and energy expert.

Dabs spokesman Hekmatullah Maiwandi said the power cuts last week were the result of technical problems in Uzbekistan, Afghanistan’s biggest power supplier.

“We were able to cover some of the shortages from the newly connected line from Turkmenistan. But provinces along the northern region were affected,” Mr Maiwandi told The National.

He said Afghanistan receives about 460MW of electricity from Uzbekistan, of which 280MW are for the capital Kabul.

About 15 provinces including Balkh are supplied from power lines running south from Uzbekistan to Kabul.

Yousef Mohammed, 35, sits with his three sons as they do their homework by gas lamp during one of the many power cuts in Kabul. Getty Images
Yousef Mohammed, 35, sits with his three sons as they do their homework by gas lamp during one of the many power cuts in Kabul. Getty Images

A doctor in another northern province, who asked for his identity to be withheld, agreed that the problem had become worse this year.

“We are witnessing a higher number of power outages than usual. We rely on a steady power supply to do our jobs to save lives,” he said.

“Without power we can’t use ECG machines, or oxygen ventilators, or conduct minor surgeries or even warm the room for the patients.

“This winter was particularly bad and we had many patients who were shivering because of the cold.”

An increase in power disruptions since the Taliban insurgent group seized power last year has raised speculation among Afghans that they are the result of tension between the Central Asian states and Afghanistan’s new rulers.

The Taliban’s Defence Minister Mohammad Yaqoob this month publicly demanded that Uzbekistan and Tajikistan return the planes and helicopters that Afghan Air Force pilots used to flee the country as the insurgents seized power last August.

Two days later, Uzbekistan’s electricity supply to Afghanistan suddenly dropped by 60 per cent, raising concerns that the move was retributive.

Uzbekistan blamed technical problems for the cut, which lasted for three days. Dabs said it caused blackouts in 16 provinces.

Mr Amin dismissed concerns about power supply being used to pressure the Taliban government.

Children sit on the base of an electricity pylon as the sun sets at Shuhada Lake in Kabul. AFP
Children sit on the base of an electricity pylon as the sun sets at Shuhada Lake in Kabul. AFP

“The problem was technical and not political,” he told The National, explaining that issues within the synchronised power grids of the former Soviet nations can have a cascading effect on the entire region.

“Just a week before the blackout, officials from Dabs and the Ministry of Energy and Water went to Uzbekistan and Tajikistan and extended the power agreement with Afghanistan for 2022,” Mr Amin said.

“According to my sources, the Taliban have even made a payment of about $25 million, of the total liability of $120m, to the four major countries that supply electricity.”

Mr Amin said it was not clear how the government managed to arrange the payment, given the international sanctions imposed on Afghanistan's banking system and a freeze of its overseas reserves after the Taliban takeover in August.

The sanctions have affected many foreign-funded projects that could have eased the country’s dependence on imported electricity, he said.

"Lack of capital makes it impossible to finish energy projects that were under way when the situation deteriorated last year," he said.

These include small-scale hydroelectric and solar projects for rural areas that were to be provided through the World Bank’s Citizens’ Charter Afghanistan Programme in collaboration with the Afghan government.

Lack of capital makes it impossible to finish energy projects that were under way when the situation deteriorated last year
Mohsin Amin,
Afghan policy analyst and energy expert

Among the larger projects to be affected is the 500 kilovolt transmission line to supply 2,000MW from Turkmenistan to Afghanistan and Pakistan.

"This was funded by Asian Development Bank but with recent sanctions on Afghanistan, investors have halted their funds fearing strong reactions from the US and European countries. It is tragic because the project was about 80 per cent completed, there is just the last bit of physical effort required to finish it,” Mr Amin said.

“Even the equipment had arrived in Afghanistan, but unfortunately the project is now in limbo.”

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

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Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

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Total received: €4,756

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Updated: February 01, 2022, 3:59 AM