SIGAR AUDIT-10-4 Energy Sector

OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

Afghanistan Energy Supply Has Increased but An 

Updated Master Plan Is Needed and Delays and 

Sustainability Concerns Remain 

January 15, 2010
SIGAR Audit-10-4 Energy Sector Page i 

OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

January 15, 2010

The Honorable Karl W. Eikenberry

U.S. Ambassador to Afghanistan 

Dr. Rajiv Shah

Administrator

U.S. Agency for International Development

William Frej

USAID Mission Director to Afghanistan

This report presents the results of our review of U.S. efforts to develop Afghanistan’s energy sector. 

Years of war and neglect have left Afghanistan’s electrical sector in poor condition. Since 2002, U.S. and 

international donors have invested millions in the construction of energy infrastructure and building 

capacity to grow and sustain Afghanistan’s energy sector. This report reviews the overall energy sector 

plans and U.S. agency programs in Afghanistan, focusing primarily on the energy assistance program of 

the largest U.S. contributor to this effort, the U.S. Agency for International Development. The report 

includes four recommendations for the Director of the U.S. Agency for International Development 

Mission to Afghanistan to improve the effectiveness of and planning for energy projects in Afghanistan. 

A summary of our report is on page ii. The audit was conducted by the Office of the Special Inspector 

General for Afghanistan Reconstruction (SIGAR) under the authority of Public Law 110-181 and the 

Inspector General Act of 1978, as amended. When preparing the final report, we considered joint 

comments received from the U.S. Embassy Kabul and the U.S. Agency for International Development 

Mission in Afghanistan. Copies of the written comments are included in appendix II of this report. 

John Brummet

Assistant Inspector General for Audits

Office of the Special Inspector General

 for Afghanistan Reconstruction
SIGAR Audit-10-4 Energy Sector Page ii

 Special inspector General for Afghanistan Reconstruction

.

`

 

What SIGAR Reviewed 

Since 2002, the United States has obligated over $732 million towards rebuilding Afghanistan’s energy sector. This 

report assesses the (1) strategy for prioritizing projects and establishing goals and timeframes, (2) status of 

Afghanistan’s energy sector and U.S. and donor efforts, (3) status of USAID energy sector projects, and (4) 

coordination of projects between the United States, international donors, and Afghanistan. We conducted this 

performance audit in Kabul, Afghanistan and Washington D.C., from April to December 2009 in accordance with 

generally accepted government auditing standards.

 SIGAR Special Inspector General for Afghanistan Reconstruction

What SIGAR Found 

Afghanistan lacks a current Energy Sector Master Plan that establishes priorities, timeframes, and costs associated with 

energy sector goals. Ambitious goals that guide Afghanistan’s energy sector priorities are unlikely to be met in the 

established timeframes. 

Assistance from the United States and other donors’ has increased power generation and accessibility in Afghanistan 

since 2001. Afghanistan’s installed energy capacity has grown from approximately 430 megawatts (MW) in 2001 to 

1029 MW in September 2009. However, Afghanistan faces several sustainability challenges in maintaining and growing

its energy supply. Specifically, the Afghanistan government lacks the ability to collect revenue, which limits their ability 

to independently operate and expand the power system, and the ability to recruit and retain qualified staff. 

The United States has taken steps to address many of Afghanistan’s energy generation and capacity issues, but projects 

have faced delays and increased costs and USAID lacks timeframes and goals for capacity building and operations and 

maintenance. Several key USAID-funded projects have faced delays and increased costs due, in part, to a general lack 

of quality assurance oversight and security concerns. USAID is in the process of addressing some of these issues. 

USAID has established a goal of providing reliable and affordable electricity by increasing operational capacity to 1,000 

MW by 2012, but has not set timeframes and goals in other areas, including capacity building and operations and 

maintenance. Furthermore, metrics have been tracked at the contract level through performance management plans, 

but relying on these plans has not been an effective method for USAID to assess progress in a strategic manner. 

While the Inter-Ministerial Commission on Energy (ICE) coordinates donor activities for the large North and South East 

Power Systems, information sharing on rural energy projects needs improvement. While U.S. and donor officials that 

we spoke with concurred that ICE is an effective coordination mechanism; rural electrification has not reached the 

same level of maturity. For example, coordination mechanisms do not exist between USAID and U.S. ForcesAfghanistan at the project level. In addition, the U.S. and international donors have not agreed on technical standards 

for rural energy projects, which increases the risk that communities will not be able to connect with one another in the 

future.

SIGAR Audits-10-4 January 2010

Afghanistan Energy Supply Has Increased 

but An Updated Master Plan Is Needed 

and Delays and Sustainability Concerns 

Remain

What SIGAR Recommends

To improve the effectiveness of USAID-funded projects and planning for future energy projects, we recommend that 

the Director of USAID Mission to Afghanistan take the following four actions: (1) work with the Afghan government 

and international donors to revise the Afghanistan Energy Master Plan and prioritize project needs, (2) establish 

milestone targets for capacity building and operations and maintenance support for USAID’s energy sector program,

(3) ensure that applicable output and outcome metrics are applied consistently among USAID energy projects, and (4) 

work with U.S. Forces - Afghanistan and international donors to establish common technical standards on rural energy 

projects. In a joint response, the U.S. Embassy Kabul and USAID Mission in Afghanistan concurred with the 

recommendations and outlined steps taken and planned to implement them.
SIGAR Audit-10-4 Energy Sector Page iii

TABLE OF CONTENTS

Background 1 

Afghanistan Lacks A Current Energy Sector Master Plan 3 

Improvements Made to Increase Energy Supply but Sustainability Is a Key Concern 4 

Most On-going USAID Energy Projects Have Not Met Scheduled Completion Dates and USAID Lacks 

Program Metrics to Facilitate Assessments 9 

Coordination on Large Projects, but Limited Information Sharing on Rural Energy Projects 14 

Conclusions 16 

Recommendations 16 

Comments 16 

Appendix I: Scope and Methodology 18 

Appendix II: Comments from U.S. Embassy Kabul and USAID Mission in Afghanistan 19

FIGURES AND TABLES

Figure 1: Afghanistan Domestic Energy Production and Imports, January 2006 to September 2009 5 

Figure 2: Contributions and Commitments to NEPS, as of July 2009 6 

Table 1: Status of Fiscal Year 2009 USAID Energy Sector Infrastructure Projects 10

Table 2: USAID Energy Program Targets and Results, fiscal years 2006 through 2008 13

ABBREVIATIONS

ANDS Afghanistan National Development Strategy

CERP Commander’s Emergency Response Program 

LBG/B&V Louis Verger/Black & Veatch 

MW Megawatts 

NEPS North East Power System

SEPS South East Power System

SIGAR Special Inspector General for Afghanistan Reconstruction

USAID Agency for International Development 
SIGAR Audit-10-4 Energy Sector Page 1 

Afghanistan Energy Supply Has Increased but An Updated Master Plan Is 

Needed and Delays and Sustainability Concerns Remain

This report assesses (1) the strategy for prioritizing projects and establishing goals and timeframes for

the development of Afghanistan’s energy sector; (2) the status of Afghanistan’s energy sector and U.S. 

and donor efforts, (3) the status of USAID energy sector projects; and (4) the coordination between the 

United States, international donors, and Afghanistan on energy projects. To accomplish these objectives 

we reviewed key documents and reports including energy sector status reports, U.S. Agency for 

International Development (USAID) assessments, and the Afghanistan Inter-Ministerial Commission on 

Energy meeting minutes. We interviewed USAID and United States Forces–Afghanistan (USFOR-A) 

officials who manage energy projects and officials from the Afghan Ministry of Energy and Water and 

Inter-Ministerial Commission on Energy. We also interviewed international stakeholders involved in the

development of Afghanistan’s energy sector, including officials from the World Bank, Asian 

Development Bank, and the United Nations Assistance Mission in Afghanistan. Finally, we interviewed

officials from the Louis Berger/Black & Veatch Joint Venture (LBG/B&V), a major contractor for USAID’s 

energy projects. We also attended U.S. and international meetings designed to coordinate donor efforts 

in the energy sector. 

For the purposes of this report, the energy sector refers to the construction, rehabilitation, and 

development of electrical infrastructure systems including generation, transmission, and distribution. 

This report provides a review of the overall energy sector program in Afghanistan, focusing primarily on 

the U.S. assistance program. The detailed results of specific energy projects will be addressed in 

separate SIGAR reports.1

 We conducted our work in Kabul, Afghanistan, and Washington, D.C., from 

April to December 2009 in accordance with generally accepted government auditing standards. A more 

detailed discussion of our scope and methodology is included in Appendix I.

BACKGROUND

Years of war and neglect have left Afghanistan’s electrical sector in poor condition. Prior to 1978, 

Afghanistan was able to access approximately 396 megawatts (MW) of power compared to

approximately 243 MW of power in 2002. In comparison, the 2007 summer operating capacity of 

Washington, D.C. alone was 806 MW of power. In 2002, over-one third of electrical power was 

imported from other countries, and many areas of Afghanistan remained without access to electricity. 

As of September 2009, the Afghan Energy Information Center estimates that approximately 15 percent 

of households in urban centers had access to electric power, whereas only 6 percent of rural households

 

1 A report on SIGAR’s audits of USAID’s assistance to the Kabul Power Plant will be available in January 2010.
SIGAR Audit-10-4 Energy Sector Page 2 

had access to electricity.

2

In February 2006, the Afghan government and the international community produced an interim 

Afghanistan National Development Strategy (ANDS) and Afghanistan Compact that include provisions for 

developing Afghanistan’s energy sector.

 Afghans rely primarily on electricity produced by costly diesel generators as 

opposed to lower cost options such as imported power or natural gas, hydro, solar, and wind energy

which are or could be generated within Afghanistan. 

3

 The ANDS established an overall goal of an “energy sector that 

provides reliable, affordable energy increasingly based on market-based private sector investment and 

public sector oversight.” ANDS also incorporated the Afghanistan Compact’s four benchmarks for 

Afghanistan’s energy development.

4

 These target goals include (1) reaching at least 65 percent of 

households in major urban areas, (2) reaching 90 percent of non-residential establishments in major 

urban areas, (3) reaching 25 percent of households in rural areas, and (4) covering at least 75 percent of 

total operating costs through user fees by the end of 2010. 

The Ministry of Energy and Water, the Ministry of Mines, the Ministry of Rural Rehabilitation and 

Development, and the Ministry of Commerce and Industries are involved in the country’s energy sector. 

The Ministry of Energy and Water is in charge of electricity generation, imports, transmission, and 

distribution; the Ministry of Mines is in charge of oil, gas, and coal; the Ministry of Rural Rehabilitation 

and Development sponsors numerous energy projects in rural areas; and the Ministry of Commerce and 

Industries is in charge of liquid fuels.

5

 In addition, the Ministries of Urban Development, Finance, and 

Economy all have roles in ensuring successful energy development in Afghanistan. 

The United States has provided over $732 million for Afghanistan’s energy sector. The United States has 

provided the majority of its assistance through USAID. Since 2002, USAID has obligated approximately 

$700 million for projects and programs in the Afghan energy sector. USAID-funded energy projects are 

primarily managed through its Afghanistan Infrastructure and Rehabilitation Program, which is

contracted to the Louis Berger Group/Black & Veatch Joint Venture (LBG B&V). USAID has also awarded 

several additional contracts with other contractors for rehabilitation of power plants, building energy 

sector capacity, information management, and promoting clean energy. In addition, USAID funds small-

 

2 The Afghan Energy Information System is a USAID-funded project to manage the collection, analysis, and

distribution of information regarding Afghanistan’s energy situation and infrastructure development.

3 An ANDS Energy Sector Strategy was prepared by the Afghan government in February 2008, and a finalized ANDS, 

incorporating benchmarks from the Afghanistan Compact, was signed in April 2008. 

4

The ANDS outlines the Government of Afghanistan's strategies for security, governance, economic growth, and 

poverty reduction. The Afghanistan Compact sets forth a framework for international cooperation. Together, the 

two documents serve as the primary mechanism for coordinating future Afghan and international reconstruction. 

Energy was addressed under the Social and Economic Development pillar, as one of six topics in the Infrastructure 

and Natural Resources sector. 

5 The Ministry of Rural Rehabilitation and Development rural development projects are primarily implemented 

through the National Solidarity Programme, a community-based development program to help communities 

identify, plan, manage, and monitor their own projects. As of January 19, 2009, 5,704 energy-related projects 

were performed through the National Solidarity Programme, according to the World Bank. The United States 

contributes to this program through its donations to the World Bank-managed Afghanistan Reconstruction Trust 

Fund.
SIGAR Audit-10-4 Energy Sector Page 3 

scale energy projects through its Alternative Development and Local Governance Community 

Development programs. USFOR-A has also provided some assistance to the energy sector, primarily 

through the Commander’s Emergency Response Program (CERP). From October 2004 to June 2009, the 

Department of Defense obligated approximately $32 million in CERP funds for energy projects in 

Afghanistan. Examples of CERP energy projects include solar lamps, micro-hydro projects, and local 

distribution networks. 

AFGHANISTAN LACKS A CURRENT ENERGY SECTOR MASTER PLAN 

Ambitious goals currently guide Afghanistan’s energy sector priorities and are unlikely to be met in the 

established timeframes. Afghanistan lacks a current Energy Sector Master Plan that establishes 

priorities, timeframes, and costs associated with energy sector goals. According to U.S. and donor 

officials, Afghanistan is in need of an updated Energy Sector Master Plan to prioritize projects and 

establish reasonable goals and timeframes. According to USAID officials, strategic priorities of the 

Afghan government are difficult to identify and often vary between different Afghan officials that USAID 

and other international donor work with to identify needs and priorities. While goals in the ANDS and 

Afghanistan Compact were established by the Afghan government in coordination with international 

donors, USAID officials stated that these goals were poorly defined and overly ambitious. One donor 

stated that the ANDS goals are exaggerated, lack implementation mechanisms, and are based on 

inaccurate information. In addition, the Afghan government’s February 2008 Energy Strategy states that 

reliable energy data for Afghanistan is scarce. The 2008 strategy further states that until data collection 

and analysis capabilities are improved, the cost of meeting the ANDS benchmarks cannot be known with 

certainty. 

According to officials from the Asian Development Bank and World Bank, many current activities in the 

energy sector are ad hoc and not managed in a strategic manner. Further, while an energy sector 

master plan was funded by the Asian Development Bank in 2004, much of that plan is out of date and 

does not reflect the current environment. For example, according to the Ministry of Energy and Water’s 

2007 Power Sector Strategy, the 2004 master plan assumed that Kabul would require 185-200 MW of 

electricity. However, based on population increases between 2004 and 2007, this requirement 

significantly underestimates Kabul’s current needs. 

The World Bank, in its Summaries of Vulnerabilities to Corruption Assessments, reports that due to the 

lack of information it was difficult to establish baselines and priorities for the energy sector.6

 

6

The Summaries of Vulnerabilities to Corruption in Afghanistan, prepared by the World Bank, summarize six 

completed assessments for various key sectors, government agencies, and core government functions in 

Afghanistan. The assessment of the energy sector was performed by the Asian Development Bank. Fighting 

Corruption in Afghanistan: Summaries of Vulnerabilities to Corruption Assessments, The World Bank, May 2009.

 In 

addition, the World Bank reports that there is no systematic energy strategy and that project 

development occurs on a discretionary basis, with individual requirements rather than institutional 

approaches being used. According to one donor official, the Afghan government needs to prioritize 

projects in a strategic manner to assist donors. The official also stated that some projects are occurring 

in areas where the need is not as great as other areas. Another donor official we spoke with noted that 

Afghan officials consistently add critical projects without ranking them in terms of priorities. While the 

Inter-Ministerial Commission on Energy has a list of funding priorities, the list concentrates on Kabul and 
SIGAR Audit-10-4 Energy Sector Page 4 

North East Power System, and is based on Inter-Ministerial Commission on Energy meetings and current 

developments. 

To address concerns with the lack of a strategic approach for project priorities, USAID has stated that it 

is currently working on identifying constraints and opportunities for energy infrastructure projects at the 

national and provincial levels within Regional Command – East and Regional Command – South. USAID 

plans to conduct this work between November 2009 and September 2010 so that it can establish a 

priority list of projects that will help guide USAID’s investments and provide the information to potential 

donors.

IMPROVEMENTS MADE TO INCREASE ENERGY SUPPLY BUT SUSTAINABILITY IS A KEY 

CONCERN 

Largely through U.S. and donor assistance for power import negotiations, power generation, and 

transmission lines and distribution, the energy supply in Afghanistan increased by an estimated 139 

percent between 2001 and 2009. However, major sustainability concerns for the maintenance and 

growth of the energy supply exist. Key issues that impact the Afghan government’s capabilities to 

sustain energy sector improvements include: the ability to collect sufficient revenue from end users and 

capability to conduct and maintain on-going operations. 

Afghanistan Energy Supply Increased

Afghanistan’s installed electrical capacity has increased in the last eight years by an estimated 139 

percent, primarily as a result of the assistance provided by the United States and international donors.

Specifically, USAID’s activities to build electrical production capabilities have directly contributed 199 

MW of energy capacity, nearly 20 percent of Afghanistan’s total installed energy capacity. In 2001, 

Afghanistan’s installed energy capacity was approximately 430 megawatts (MW) 7 compared to 1,028.5

MW as of September 2009.8

 Figure 1 shows Afghanistan’s total energy production from 2006 through 

July 2009, including domestic production (thermal and hydro) and imports, as reported by the Afghan 

Energy Information Center. According to data provided by the Afghan Energy Information Center, 

Afghanistan’s domestic energy production has continued to increase since 2006. In three years, 

Afghanistan has increased its domestic energy production by nearly 100,000 (MWH) of electrical power. 

In August 2009, Afghanistan produced approximately 180,415 of electricity compared to 88,804 MWH of 

electrical power in August of 2006.9

 

7 A megawatt (MW) is a unit of electric capacity. 

8 This amount increased significantly with the December 2009 commissioning of the USAID-built Kabul 105 MW 

Power Plant, also known as the Tarakhil Power Plant. 

9 A megawatt-hour (MWH) is a unit of electric energy produced by one megawatt operating or producing 

electricity for one hour. 
SIGAR Audit-10-4 Energy Sector Page 5 

Figure 1: Afghanistan Domestic Energy Production and Imports, January 2006 to September 

2009 (MWH)

Source: SIGAR analysis of Afghan Energy Information Center data.

The largest energy project funded by the United States and international donors is the ongoing 

construction of the North East Power System (NEPS). The NEPS program was established to provide 

lower-cost power to cities and towns in the northeast portion of Afghanistan, including Kabul. A large 

part of NEPS development involves the construction of power lines and distribution systems needed to 

import power from neighboring Tajikistan, Turkmenistan, and Uzbekistan at significantly lower cost than 

diesel powered sources of electricity.10 The Afghanistan government and U.S. and international donors 

have been working to establish long-term power purchase agreements with Uzbekistan, Tajikistan, and 

Turkmenistan. Power-sharing agreements with these neighboring countries could eventually yield a 

total of 900 MW of daily imported power, according to the May 2009 USAID Energy Strategy. USAID has 

obligated $3.75 million to provide the Ministry of Energy and Water with technical assistance in 

obtaining imported power. Figure 2 shows contributions and commitments by donors to the NEPS. The 

United States has funded an estimated $423 million for the NEPS through USAID. Of this amount, 62 

percent ($260 million) has been provided for power generation and 12 percent ($51 million) for 

transmission lines and distribution. The remaining 26 percent ($112 million) was provided for other 

purposes including technical assistance for the power purchase agreements, a national load dispatch 

and control center, and a reactive power compensation system. 

 

10 For example, total generation cost for diesel generators range from $0.20 to $0.46/kWh based on 2009 prices, 

whereas power imports from Uzbekistan cost $0.07/kWh.
SIGAR Audit-10-4 Energy Sector Page 6 

Figure 2: Contributions and Commitments to the North East Power System, as of July 2009

Source: Inter-Ministerial Commission on Energy data.

Note:

a

Other includes the Islamic Development Bank and the KfW German Development Bank. 

The Afghanistan’s 2005 Power Sector Master Plan identified the import of power as a short and medium 

term replacement to costly diesel generators. According to the May 2009 USAID Energy Strategy, 

power sharing agreements with Aghanistan’s neighboring countries and supporting infrastructure 

projects could eventually yield a total of 900 MW of power. Agreements are in place to import 370 MW 

of the potential 900 MW of power available. USAID has played a key role in assisting the Afghanistan 

government in negotiating agreements with Uzbekistan and Tajikistan for about 370 MW of imported 

power through NEPS. Of this amount, 70 MW of Uzbekistan power is currently flowing through NEPS to 

Mazari-e-Sharif (30MW) and Kabul (40MW). However, Afghanistan lacks the infrastructure to utilize the 

potential 300 MW of power from Tajikistan.

11 The Asian Development Bank and other donors have 

committed to begin building the necessary infrastructure to import power from Tajikistan. In addition, 

the next phase of the agreement between the Afghanistan and Uzbekistan governments, which 

according to USAID was under negotiation in December 2009, may result in the import of up to an 

additional 180 MW of power from Uzbekistan in the near future. 

USAID has also funded additional projects for NEPS. For example, USAID is funding construction at the 

Kabul 105 MW power plant, reactive power compensation system, and the national load control 

 

11 In 2008, the Afghanistan Government signed a 20-year power purchase agreement with Tajikistan for 300 MW 

of power for 7 months a year.
SIGAR Audit-10-4 Energy Sector Page 7 

center.12 In addition to assisting with power import negotiations, USAID has projects underway for the 

installation, rehabilitation, and operations and maintenance of several power plants throughout 

Afghanistan. One of these plants is the Kabul 105 MW Power Plant, which was commissioned in 

December 2009 with its full capacity of 105 MW. 

According to USAID, other significant energy projects funded include (1) the South East Power System 

(SEPS) including major renovations to the Kajakai Dam which, once completed, will provide power to an 

estimated 800,000 people in Helmand and Kandahar provinces; (2) the Afghanistan Clean Energy 

Program, awarded September 2009, designed to provide clean energy solutions for approximately 300 

communities in South and East Afghanistan; (3) the Afghanistan Energy Capacity Building program, 

which trained nearly 2,000 Afghan government staff in technical energy fields during FY 2009; (4) the 

rehabilitation of Darunta Hydropower Plant, the main power source for Jalalabad; and, (5) natural gas 

field exploratory and investor work in the Sheberghan region of Afghanistan. 

Afghanistan Government Lacks the Capability to Collect Revenues to Fund Fuel Costs and 

Operations and Maintenance Expenses

While the United States and other donors have funded or committed approximately $1.6 billion to the 

NEPS system, the Afghan government is unable to fully fund operations and maintenance of the donorprovided facilities. The Afghanistan government lacks the capability to collect the revenue needed to 

fund current and expected fuel costs and operating and maintenance expenses. This has resulted in the 

need for the United States and other donors to spend millions on such expenses to ensure the 

operations and maintenance of its projects. For example, according to the Afghan Energy Sector 

Strategy, the energy sector lost $128.5 million in revenue in 2005 due to poor commercial operations. 

In another example, USAID estimates that the Kabul Electricity Directorate alone lost approximately 60

percent or $125 million in revenues in 2008 and without changes this loss could rise to $275 million 

annually by 2015.13 

Afghanistan’s operational capacity (621.4 MW) is at 60 percent of its installed capacity ( 1028.5 MW) 

and the United States is continuing to fund the operations and maintenance of completed USAID 

projects that have contributed to the installed capacity. 14

 

12 A reactive power compensation system is necessary to control the NEPS voltage level, minimize system losses, 

and maximize power transmitted through NEPS. A national load control center will allow the Afghans to monitor

data and control the various elements within NEPS substations and power stations to ensure safe and efficient 

operation of the power supply network. 

 In addition, of an estimated $139.2 million 

identified for operations and maintenance of NEPS, only $27.2 million (19.5 percent) was funded by the 

Asian Development Bank, as of July 2009. The remaining $112.0 million is listed as a critical need for the 

operations of NEPS and is for key items such as equipment and spare parts. Numerous power 

generation units are operating at below installed capacity due to issues in fuel, water, and rehabilitation. 

13 USAID stated that its estimates are understated because they do not take into account depreciation, underspending on staff salaries and maintenance, and fuel contributions by the United States, all of which would further 

increase losses. 

14 Installed capacity is the maximum megawatts that can be produced. Operational capacity is the current amount 

of megawatts able to be produced.
SIGAR Audit-10-4 Energy Sector Page 8 

For example, plants in Qalat, Lashkar-Gah, and Kandahar have an installed capacity of 32.0 MW 

combined. However, due to low fuel levels, the operating capacity of these plants as of July 2009 was

20.0 MW, or 62.5 percent of installed capacity. Between April 2007 and May 2009, USAID spent an 

additional $15.2 million for operations and maintenance of these and other donor-built power plants 

and plans to spend an additional $15.3 million through April 2011. This shortfall occurred because the 

Afghanistan government only budgeted $40.0 million although Afghanistan’s fuel needs through 2010 

are estimated at $57 million. As a result, USAID provided $27 million, originally intended to fund 

projects through the Afghanistan Reconstruction Trust Fund, to pay for fuel needed for power 

generation. Of this amount, USAID has spent $15.6 million to provide fuel for Kabul power generation. 

Corruption in the energy sector affects Afghanistan’s ability to collect revenue. According to USAID, a 

major point of corruption in Afghanistan is the electrical distribution systems/processes. Corruption 

examples include extra fees for connections, bribes to meter readers, bypassing of meters, and 

incomplete revenue returns to Central Ministry of Energy and Water. The Asian Development Bank, in 

the World Bank’s Summaries of Vulnerabilities to Corruption Assessments for the energy sector, cited 

numerous weaknesses in Afghanistan’s management of the energy sector which leave it susceptible to

corruption. The Bank cited examples of patronage for ministry jobs, consumer expectations of bribes to 

pay for utility services, and investor expectations of demands and bribes. For example, according to 

Bank reporting, as many as 25 signatures are required in order to secure an electricity connection in 

Kabul through the official procedures. However, according to the Bank, no signatures are required for 

connections obtained through personal connections or bribes. In addition, according to an InterMinisterial Commission on Energy report, a customer is required to request permission from the

Minister or a Deputy Minister at the Ministry of Energy and Water to receive permission to access the 

distribution system. The cost to obtain permission to build a connection could well exceed the actual 

cost to connect to the distribution system, according to the Inter-Ministerial Commission on Energy

report.

 

Both the United States and other international donors have sought to develop the Afghan government’s 

ability to operate electric utilities on a commercial basis. According to USAID, one of the key steps in 

reducing commercial losses, minimizing corruption, and increasing revenue collection is the transfer of 

assets from the state-owned Da Afghanistan Breshna Moassessa to a commercialized entity, Da 

Afghanistan Breshna Sherkat (DABS). In September 2009, with the support of USAID and other donors, 

the assets were transferred to the commercialized entity. In another example, according to USAID, they 

are providing support to the commercialized DABS through a 2.5-year, $52 million contract designed to

improve management, staffing structure, metering, and revenue collection at the entity. Similar work is 

underway at the Kandahar division of DABS to rehabilitate the urban grid. 

Afghanistan Government Lacks an Experienced Workforce for Maintenance and Development 

of Energy Sector

The Afghan government also lacks an experienced workforce. According to U.S. Forces Afghanistan 

officials, the management and operational capacity of the Ministry of Energy and Water and Da 

Afghanistan Breshna Sherkat, the national electric utility, is extremely weak due to an aging labor force 

and a shortage of educated young people to enter the skilled labor, technical, and professional ranks. 

The Summaries of Vulnerabilities to Corruption Assessments also report that due to decades without 

skills upgrading or exposure to modern technical approaches in energy development, human capacity at 

both the technical and managerial levels is weak. Furthermore, the summaries report that sound sector 
SIGAR Audit-10-4 Energy Sector Page 9 

development is impeded by a lack of human capacity, incentive based pay, and competitive salaries. For 

example, officials at the USAID-funded Afghanistan Energy Information Center are planning to transfer 

functions from the center to the Afghan Ministry of Energy and Water. However, officials noted that 

one of the challenges is the ability to ensure that staff remain with the ministry once the office is turned 

over to the Afghan government due to the differences in pay between the Afghan government and 

contractors. USAID has paid for capacity building in some of Afghanistan’s diesel power plants. 

However, in March 2009, a contractor reported that it had lost trained diesel power plant employees 

due to better paying jobs elsewhere. 

USAID has taken several initiatives to improve the capabilities of the Afghan workforce in the energy 

sector. Specifically, USAID has contracted engineering specialists to provide training to Ministry of 

Energy and Water and Da Afghanistan Breshna Sherkat, and to build a training institute for energy

sector workers.15

MOST ON-GOING USAID ENERGY PROJECTS HAVE NOT MET SCHEDULED COMPLETION DATES

AND USAID LACKS PROGRAM METRICS TO FACILITATE ASSESSMENTS

 In addition, all individual USAID contracts and task orders include a component of 

capacity development, according to USAID officials.

Several key USAID-funded energy projects have faced delays and increased costs due in large part, to a 

general lack of quality assurance oversight and security concerns. In fiscal year 2009, USAID had 6 active 

infrastructure projects underway for the energy sector valued at an estimated $422.6 million. As shown 

in table 1, all but one of these ongoing USAID projects have not met scheduled completion dates. In 

addition, donors have also cited issues regarding security and a lack of qualified contractors to perform 

work. According to an Inter-Ministerial Commission on Energy report, most NEPS energy projects in 

Afghanistan have faced delays ranging from 3 to 6 months. Reasons for delays include poor contractor 

performance, poor contract oversight, and security concerns.

 

15This is a $17.2 million contract for three years with Advanced Engineering Associates, International.
SIGAR Audit-10-4 Energy Sector Page 10

Table 1: Status of Fiscal Year 2009 USAID Energy Sector Infrastructure Projects

Project Total 

Estimated 

Cost

(in millions)

Start Date Original 

Completion 

Date

Estimated

Completion 

Date

Note

Kajakai Hydro 

Power Plant 

Rehabilitation

$47.9 1/1/2007 6/30/2008 10/31/2009 Contract ended a 

Kabul 105 MW 

Power Plant

$300.8 7/31/2007 b 8/31/2009 5/31/2010 Behind Schedule c

Sheberghan Gas 

Fields Development

$11.9 2/7/2008 4/30/2009 6/9/2009 Terminated for 

convenience on 

6/1/2009 

Reactive Power 

Compensation 

$24.1 6/10/2008 6/9/2009 11/30/2010 Behind Schedule

National Load 

Control Center

$28.1 6/10/2008 2/28/2010 5/31/2010 Behind Schedule

Darunta HydroElectric Power Plant 

Rehabilitation

$9.8 8/1/2008 1/31/2010 1/31/2010 No change in schedule

Source: SIGAR analysis of USAID contracts and contractor schedules. 

Notes:

a At the completion of this contract, the original project requirements were not met. While the project has

rehabilitated two turbines generating 33 MW, the installation of an additional power generation unit will not be 

completed by the contractor due to security issues. Furthermore, under USAID’s Rehabilitation of Economic 

Facilities and Services program, USAID spent an additional $41.8 million for this power plant project.

b A definitive contract issued on July 31, 2007 for task order 9 superseded the letter contract initially issued on

May 24, 2007. The letter contract’s total value was $29.3 million which was incorporated into the definitive 

contract.

c While 105 MW of power was commissioned and connected to the grid on 12/8/2009; additional work remains in 

order to complete the project on 5/31/2010. 

The Sheberghan gas fields development project represents a particularly interesting case. At the point 

of the termination for convenience, the United States had spent $7.1 million on the project. According 

to USAID, the termination for convenience was due to subcontractor nonperformance. However, 

LBG/B&V officials stated that the termination was at the convenience of the U.S. Government and that 

there were project delays caused by Afghan customs issues, security issues, and the need to negotiate 

assumption of certain project risks by the Afghan government. This cancellation has significant 

implications for Afghanistan’s future energy independence since natural gas represents an indigenous

energy resource which experts estimate could, in theory, meet the country’s demand for low cost power

for decades to come if properly developed. USAID officials stated that they felt the funds would be 

better spent by setting up a public-private partnership to build a power plant. 
SIGAR Audit-10-4 Energy Sector Page 11

Most Energy Projects Lack Independent Quality Assurance Programs 

USAID lacks independent quality assurance on most energy projects. Since 2002, USAID’s annual 

Federal Managers’ Financial Integrity Act certification has noted that security restrictions have limited 

USAID’s ability to visit projects sites and monitor implementation in an adequate manner. In its fiscal 

year 2008 certification, USAID noted that the limited monitoring leaves USAID programs susceptible to 

fraud, waste, and mismanagement of resources. For projects under the Afghanistan Infrastructure and 

Rehabilitation Program contract, USAID has relied on the contractor to provide reports and oversight. 

However, that reporting has not always been timely or sufficient. For example, in January 2009, USAID 

notified LBG/B&V that it was not receiving critical information in a timely manner. In another example, 

a USAID Inspector General report found that due to a lack of on-site quality assurance at the Kabul 105

MW Power Plant, USAID was not fully aware of problems with the project.

16 We found that while USAID 

reportedly conducted major site visits approximately once a month, it did not have independent on-site 

quality assurance for most projects. Even though USAID has hired a contractor to perform independent 

oversight services for some of their projects, only one energy project, the Darunta Power Plant, had

received independent oversight by the contractor as of June 2009. According to USAID, in July 2009, 

quality assurance personnel began working on the Kabul 105 MW Power Plant. In addition, USAID’s 

work at the Kajakai Hydropower Plant received quality assurance engineering on an ongoing basis. 

Security Concerns Impact Progress and Costs

Security issues have prevented some projects from being completed on schedule. According to 

LBG/B&V, the deteriorating security, particularly in the south and east of Afghanistan has increased cost 

and delayed schedules. For example, in LBG/B&V’s first task order for operations and maintenance of 

diesel plant operations, mostly in southern Afghanistan, security costs were about 9 percent of the total 

task order award. In the follow-on task order, security costs accounted for almost 30 percent of the task 

order’s value. According to LBG/B&V, as of August 2009, there have been a total of 207 casualties under 

the Afghanistan Infrastructure and Rehabilitation Program.

17 

The Kajakai Hydropower Plant demonstrates the impact of an insecure environment on the costs and 

schedule of a project. According to a USAID Inspector General report, security issues at the Kajakai

Hydropower Plant have contributed to delays and increased costs for air and military ground 

transportation and other things. Due to poor security conditions, the road to Kajakai was unsafe to 

move equipment and resulted in the need to airlift equipment to the site. The USAID Inspector General 

report estimates that the use of airlift instead of ground transportation increased USAID’s cost by nearly 

$7 million. To move large parts that could not be done using airlift, USAID required the assistance of 

International Security Assistance Forces convoy capabilities, at a reported cost of approximately $1 

million. In addition, due to kidnapping threats, the Chinese subcontractor that was rehabilitating one 

power generation unit and installing another was directed in November 2008 by the Chinese 

government to withdraw its staff from the jobsite. Furthermore, the potential power generated by 

 

16 USAID Inspector General, Audit of USAID/Afghanistan’s Power Sector Activities Under its Afghanistan 

Infrastructure Rehabilitation Program, Report No. 5-306-10-002-P (Manila, Philippines: Nov. 10, 2009).

17 Casualties include individuals wounded, killed, or kidnapped. LBG reported to us that it has experienced 195 

killed, 286 wounded, and 28 kidnapped over the last 9 years in Afghanistan.
SIGAR Audit-10-4 Energy Sector Page 12

Kajakai, once a third turbine is installed, cannot be fully utilized until an additional transmission line is 

built. Due to security threats along the road to the dam, that transmission line has not been built.

USAID Is Taking Steps to Address Causes for Project Delays 

In March 2009, following schedule delays and dissatisfaction with LBG/B&V’s performance, USAID 

conducted its own review of its Afghanistan Infrastructure Rehabilitation Program contract and 

recommended changes in USAID’s contract management such as, increasing contractor competition and 

improved oversight. Based on discussions with USAID program and contracting officials, the 

implementation of many of these recommendations is in process. For example, according to USAID

officials, the agency plans to restructure its contracts to increase competition. For future contracts, 

rather than one indefinite quantity contract encompassing multiple sectors, USAID plans to issue 

separate sector contracts. This is designed to allow for multiple contractors to bid on each USAID 

project. According to the review, although USAID had established independent oversight on many of 

Afghanistan Infrastructure and Rehabilitation Program’s task orders, the energy projects lacked 

independent oversight. USAID officials indicate that they are addressing this issue by requesting that 

their contractor, International Relief and Development, provide oversight at energy projects. According 

to USAID officials, oversight reporting by the contractor was expected to be in place by November 2009. 

Additional Metrics Needed to Assess Project Effectiveness 

While USAID has established a goal of providing reliable and affordable electricity by increasing 

operational capacity to 1,000 MW by 2012, it has not set timeframes and goals for capacity building and 

operations and maintenance. Since 2007, USAID has tracked three output metrics for energy programs 

in Afghanistan: (1) capacity constructed or rehabilitated; (2) number of people with increased access to 

modern energy services; and (3) number of people receiving U.S. government supported training in 

energy.18

 

18 In fiscal year 2006, only capacity constructed or rehabilitated was tracked. While additional metrics were 

established in 2007, data was not available until fiscal year 2008.

 Table 2 below provides USAID’s three targets and results from 2006 through 2008. While 

USAID tracks and reports these metrics, additional output and outcome metrics are specifically related

to individual contracts and metrics within performance management plans. 
SIGAR Audit-10-4 Energy Sector Page 13

Table 2: USAID Energy Program Targets and Results, fiscal years 2006 through 2008

Indicator Baseline 

Year

2006 

Result

2007 

Target

2007 

Result

2008 

Target

2008 

Result

2009 

Target

2009 

Result

Capacity constructed 

or rehabilitated (MW) 

as a result of U.S. 

Government 

assistance

2006 58.0 25.0 19.3 14 51a 100 105.0

Number of people 

with increased access 

to modern energy 

services as a result of 

U.S. Government 

assistance

2007 -- n/a n/a 100,800 415,300a 1,870,000 2,060,000

Number of people 

receiving U.S. 

Government 

supported training in 

technical energy fields

2007 -- n/a n/a 10 48 941 2,209

Source: USAID data.

Note: a According to USAID, these numbers for 2008 results represent capacity and access to services that were

maintained by USAID during fiscal year 2008 rather than expanded capacity and access to services.

Relying on the performance management plans and contract specific metrics has not been an effective 

means for USAID to assess overall progress in a strategic manner because they are not consistently 

tracked or applied to all relevant projects. For example, the performance monitoring plan for the 

Afghanistan Infrastructure and Rehabilitation Program includes 5 output indicators and 5 outcome 

indicators for the energy sector program. However, these indicators were not consistently tracked in 

the first two years of the program. Specifically, the Afghanistan Infrastructure and Rehabilitation 

Program contract was awarded in August 2006, with the first energy task order awarded in January 

2007, but the performance monitoring plan was not agreed upon until March 2009 and the first report 

produced in May 2009. According to a USAID review, the baseline and performance data were not 

consistently tracked until March 2009. Other relevant metrics that were not tracked across all USAID 

energy projects includes: full-time Afghan jobs created, capacity maintained, household income, average 

hours of daily electricity service, and weighted average cost of electric energy supplied to the grid. The 

tracking of these metrics would enable USAID to better assess progress of their overall energy assistance 

program. In our review of other USAID projects, we found that contractor reporting of all relevant 

output or outcome indicators was not required. For example, the only required contractor tracking and 

reporting for the Darunta Power Plant was for MW rehabilitated at the end of the project. Contractor 

reporting of other relevant metrics, such as the number of people trained and Afghan jobs created was 

not required in the contract. In another example, USAID’s capacity building program for the energy 

sector, does not track the number of Afghan jobs created. 
SIGAR Audit-10-4 Energy Sector Page 14

COORDINATION ON LARGE PROJECTS, BUT LIMITED INFORMATION SHARING ON RURAL 

ENERGY PROJECTS

While the Inter-Ministerial Commission on Energy coordinates donor activities for the North East Power 

System (NEPS) and South East Power System (SEPS) projects, information sharing on rural energy 

projects is weak. For example, U.S. Forces Afghanistan and USAID do not share information on their 

energy projects at the project level. Specifically, USAID does not have complete knowledge of energy 

projects that have been conducted by U.S. Forces Afghanistan under the CERP program. In addition, 

donors have noted the need to coordinate to establish common technical standards for rural energy 

projects. Such standards would allow for donor projects to standardize spare parts and operations and 

maintenance, and allow communities to eventually connect with one another through compatible 

systems. 

Efforts on Afghanistan’s largest systems, the NEPS and SEPS are well coordinated. The Inter-Ministerial 

Commission on Energy was created by presidential decree in October 2006 to provide oversight of the 

energy sector policy and infrastructure investments, including coordination of international support. 

USAID and international donors provide the Inter-Ministerial Commission on Energy with assistance to 

track progress, provide reports, and identify problems and funding gaps. Afghan, Asian Development 

Bank, and United Nations officials all stated that coordination through the Inter-Ministerial Commission 

on Energy has been effective. A U.S. Embassy official stated that compared to other sectors, the InterMinisterial Commission on Energy has worked well and could be a model for coordination. In June 2009, 

SIGAR attended the monthly Inter-Ministerial Commission on Energy meeting as an observer and found 

that key stakeholders on the NEPS and SEPS and representatives from Afghan ministries were all 

engaged. This meeting also provided attendees with information from key contractors on the status of 

U.S. and international donor projects. 

Coordination on rural energy projects has not reached the maturity of coordination efforts for the NEPS 

and SEPS programs. Rural energy is a key component in expanding access to energy. USAID estimates 

that 28 million people, mostly rural poor, have no access to reliable, modern forms of energy and 

instead rely on wood and dung for fuel. In August 2008, the Inter-Ministerial Commission on Energy 

established a rural electrification subcommittee in order to provide access to energy services for the 

rural population and to explore Afghanistan’s potential in alternative energy sources. As part of the 

Afghanistan Compact goals, the Afghan government committed to create a plan for the development 

and use of renewable energies by the end of 2007. One of the subcommittee’s tasks is to develop this 

plan but, according to USAID, as of September 2009, this has not been done. 

USAID and other entities have recently taken some steps to improve coordination. The U.S. Embassy in 

Kabul established an infrastructure working group to coordinate the efforts of State, USAID, and U.S. 

Forces Afghanistan, which includes the coordination and planning of energy infrastructure projects. 

According to USAID, the group plans to create an energy program strategy to better coordinate their 

efforts. In addition, USAID’s Afghanistan Clean Energy Program received direct input from provincial 

reconstruction teams on rural energy projects. Finally, USAID also participates in the CERP board for 

project approval and both agencies are members of the Inter-Ministerial Commission on Energy. 

Despite efforts by USAID and U.S. Forces Afghanistan to coordinate their activities in the energy sector, 

additional information sharing is needed. SIGAR and Government Accountability Office reports have 

noted the difficulties in information sharing between U.S. agencies. In July 2009, SIGAR found that U.S. 
SIGAR Audit-10-4 Energy Sector Page 15

agencies and commands lack a common integrated project management system that can share 

information between various reconstruction actors in order to improve coordination. While key U.S. 

agencies and commands have individual management information systems, there is no integrated 

system which would provide the necessary level of information sharing for decision-makers.19 In May

2009, the Government Accountability Office reported that while mechanisms exist to facilitate 

coordination, U.S. Forces Afghanistan and USAID lack information that would provide greater visibility 

on all U.S. government development projects in Afghanistan.20 As of July 2009, information on CERP 

projects was not directly provided to USAID. While USAID has representatives at the Provincial 

Reconstruction Teams and CERP boards, this does not ensure that all project information is provided to 

decision makers and implementers at USAID. These reports made several recommendations for 

improvement. In response to the Government Accountability Office and SIGAR reports, officials 

indicated that the implementation of the recommendations is in progress. 

Furthermore, U.S. agencies and international donors have not established common technical standards 

for rural energy projects. U.S. and donor officials we interviewed cited the need for common technical 

standards. According to the Asian Development Bank, common technical standards would allow rural 

energy projects done by various donors and agencies to achieve standardization of spare parts, 

operations and maintenance. According to an official from United Nations Assistance Mission 

Afghanistan, a lack of common technical standards increases the risk that communities will face 

compatibility issues and will be unable to connect with one another. A German Technical Cooperation 

official, who also assists the Afghans on the Inter-Ministerial Commission on Energy rural electrification 

subcommittee, commented that while technical standards are important, enforcement of these 

standards is also necessary. 

 

19A Better Management Information System Is Needed to Promote Information Sharing, Effective Planning, and 

Coordination of Afghanistan Reconstruction Activities, SIGAR Audit-09-3, July 30, 2009.

20Military Operations: Actions Needed to Improve Oversight and Interagency Coordination for the Commander’s 

Emergency Response Program, GAO-09-615, May 18, 2009.
SIGAR Audit-10-4 Energy Sector Page 16

CONCLUSIONS

Afghanistan will need continued investments by the United States and donors in order to accomplish its 

energy goals. Years of neglect cannot be overcome until the Afghanistan government has the capability 

to recover costs, expand its capabilities, and conduct operations and maintenance of the energy sector. 

Until that time, Afghanistan will continue to rely heavily on donor funds in order to ensure that 

investments do not fall to waste. Nevertheless, there are steps that the United States can take to 

improve the effectiveness of its assistance program and help Afghanistan reach realistic goals and 

timeframes and establish common technical standards for rural energy projects.

RECOMMENDATIONS

To improve the effectiveness of USAID-funded projects and planning for future energy projects, we 

recommend that the Director of the USAID Mission in Afghanistan take the following four actions: 

• Work with the Afghan government and international donors to revise the Afghanistan Energy 

Master Plan to include realistic goals and timeframes based on prioritized project need, costs, 

and benefits;

• Establish milestone targets and metrics for capacity building and operations and maintenance 

support for USAID’s energy sector program in Afghanistan; 

• Ensure that applicable output and outcome metrics are applied consistently amongst USAID 

projects, and

• Work with U.S. Forces – Afghanistan and international donors to establish common technical 

standards on rural energy projects. 

COMMENTS

U.S. Embassy Kabul and USAID Mission in Afghanistan each provided joint written comments on a draft 

of this report. Both US Embassy Kabul and USAID Mission in Afghanistan submitted separate written 

comments, but the comments themselves are identical to each other. We have included both identical 

sets here to demonstrate that both express joint concurrence with the report’s findings. The Embassy’s 

Coordinating Director for Development and Economic Affairs and the USAID Mission Director noted that 

the effectiveness of future USAID-funded energy projects and the planning for these projects could be 

improved by implementing SIGAR’s four recommendations. In their comments they outlined actions 

taken and planned in response to those recommendations. The U.S. Embassy and USAID Mission also 

provided technical comments which SIGAR has incorporated into the report, as appropriate. SIGAR also 

provided a draft of this report to United States Forces Afghanistan who did not have any comments.

Key actions planned by USAID include:

• Working with the Asian Development Bank and the Inter-Ministerial Commission on Energy to 

update Afghanistan’s Energy Master Plan by June 2011;
SIGAR Audit-10-4 Energy Sector Page 17

• Work with the Ministry of Energy and Water to develop a strategy by April 2010 that will 

establish milestone targets and metrics for capacity building and operations and maintenance 

support; 

• By April 2010, expand the number of indicators that are tracked across USAID’s energy portfolio, 

and

• By 2011, establish common technical standards for rural energy projects in coordination with 

the Afghan government, U.S. Forces – Afghanistan, and donors.

We believe that these actions, if fully implemented, are an important step in ensuring that U.S. 

investments in Afghanistan’s energy sector are planned effectively, their impacts measured, and that 

the Afghans are able to independently operate and maintain the sector.
SIGAR Audit-10-4 Energy Sector Page 18

APPENDIX I: Scope and Methodology

To assess the strategy for prioritizing projects and establishing goals and timeframes, we reviewed the 

Afghanistan Compact, the ANDS, Afghan government’s energy sector strategy, and the Ministry of 

Energy and Water’s energy strategy. 

To assess the status of Afghanistan’s energy sector and U.S. and donor efforts, we reviewed

documentation from the Afghanistan Energy Information Center, the Inter-Ministerial Commission on 

Energy, and USAID. In addition, we met with officials from USAID, Department of State, and U.S. Forces 

– Afghanistan, Afghan officials at the Ministry of Energy and Water and Da Afghanistan Breshna Sherkat, 

World Bank, and the Asian Development Bank. In addition, we attended the Combined Joint Task Force 

-101 Power and Water Conference in May 2009 as well as the June 2009 Inter-Ministerial Commission 

on Energy meeting. 

To assess progress of USAID energy sector projects, we reviewed USAID strategies, contracts for fiscal 

year 2009 ongoing energy projects, performance management plans, contractor reports, and financial 

information to identify metrics and goals. In addition, we spoke with program and contracting officials 

at USAID and LBG/B&V officials. 

To assess coordination between U.S. agencies, international donors, and the government of 

Afghanistan; we met with USAID, U.S. Forces Afghanistan, State, and Afghan officials. In addition, we 

met with key international donors on the North East Power System (NEPS) including the World Bank, 

Asian Development Bank. For rural energy, we met with key international donors and officials including 

German Technical Cooperation and the United Nations Assistance Mission in Afghanistan. We also 

reviewed documentation from the Inter-Ministerial Commission on Energy and its Rural Electrification 

Subcommittee. 

We conducted this performance audit from April to December 2009 in Washington, D.C. and Kabul, 

Afghanistan. We conducted this performance audit in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe the evidence obtained provides a reasonable basis for our findings and 

conclusions. The audit was conducted by the Office of the Special Inspector General for Afghanistan 

Reconstruction under the authority of Public Law 110-181, Section 1229, and the Inspector General Act 

of 1978, as amended.
SIGAR Audit-10-4 Energy Sector Page 19

APPENDIX II: Comments From U.S. Embassy Kabul and U.S. Agency for International 

Development Mission in Afghanistan
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(This report was conducted under the audit project code SIGAR-004A).
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SIGAR’s Mission The mission of the Special Inspector General for Afghanistan 

Reconstruction is to enhance oversight of programs for the 

reconstruction of Afghanistan by conducting independent and 

objective audits, inspections, and investigations on the use of 

taxpayer dollars and related funds. SIGAR works to provide 

accurate and balanced information, evaluations, analysis, and 

recommendations to help the U.S. Congress, U.S. agencies, and 

other decision-makers to make informed oversight, policy, and 

funding decisions to:

• improve effectiveness of the overall reconstruction strategy 

and its component programs;

• improve management and accountability over funds 

administered by U.S. and Afghan agencies and their 

contractors;

• improve contracting and contract management processes;

• prevent fraud, waste, and abuse; and

• advance U.S. interests in reconstructing Afghanistan.

Obtaining Copies of SIGAR To obtain copies of SIGAR documents at no cost, go to 

Reports and Testimonies SIGAR’s Web site (www.sigar.mil). SIGAR posts all released 

 reports, testimonies, and correspondence on its Web site.

To Report Fraud, Waste, and To help prevent fraud, waste, and abuse by reporting 

Abuse in Afghanistan allegations of fraud, waste, abuse, mismanagement, and

Reconstruction Programs reprisal contact SIGAR’s hotline:

 

• Web: www.sigar.mil/fraud

• Email: hotline@sigar.mil

• Phone Afghanistan: +93 (0) 700-10-7300

• Phone DSN Afghanistan 318-237-2575

• Phone International: +1-866-329-8893

• Phone DSN International: 312-664-0378

• U.S. fax: +1-703-604-0983

Public Affairs Public Affairs Officer

• Phone: 703-602-8742 

• Email: PublicAffairs@sigar.mil 

• Mail: SIGAR Public Affairs

400 Army Navy Drive

Arlington, VA 22202