CASA-1000 Project Moves Forward Despite Security Risks

On September 16–17, officials from Kyrgyzstan, Tajikistan, Pakistan and Afghanistan met in Islamabad to sign a Resolution on Contracting Structure and Commercial Principles in the effort to launch the CASA-1000 trade and energy project in 2014. The parties hope CASA-1000 will help bring electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan already in 2017 (tribune.com.pk, September 16).

If realized, the project would establish a regional electricity market, contribute to inter-regional development involving Central and South Asia, and promote further cooperation between the two poorly integrated regions of the world. But just like the TAPI pipeline—an ambitious energy initiative seeking to bring natural gas from Turkmenistan to Afghanistan, Pakistan and India—the CASA-1000 scheme faces security and geopolitical risks that make its implementation unrealistic for many skeptics. Some of these risks stem from water and border disputes in Central Asia, tense relations between Uzbekistan and Tajikistan, as well as friction between Pakistan and Afghanistan—all further affected and complicated by the planned withdrawal of international coalition forces from Afghanistan by the end of 2014.

The participants envisage that electricity transmission lines of the CASA-1000 project, estimated to cost $1 billion, will extend over 1,222 kilometers to initially supply 1,000 megawatts (MW) of electricity to Pakistan and 300 MW to Afghanistan. Australia, the United States, the United Kingdom, as well as the Asian Development Bank, Islamic Development Bank and the World Bank have all lent strong support to the project, with proponents pointing to major economic and security benefits from such an undertaking (casa-1000.org, nation.com.pk, September 17).

Indeed, Kyrgyzstan and Tajikistan lack fossil fuel resources but enjoy 80,000 MW in hydropower potential, of which only 10 percent has been utilized to date. Exporting their surplus electricity during summer months would help generate revenue that could then be used to upgrade their crippled energy infrastructure. Tajikistan alone loses about $170 million–$200 million due to the lack of summer electricity exports (afghanistan.ru, January 21; casa-1000.org, September 17).

Pakistan and Afghanistan, where millions either live without electricity or suffer from recurring power outages, would benefit as well. Pakistan has faced frequent energy crises that have undermined the growth prospects of its economy, which experiences electricity shortages of up to 5,000 MW. Afghanistan, just like Pakistan, needs more power to feed its small yet growing economy. The energy demand of the two countries is a contributing factor to the broader rising energy demand in Asia, where gas and oil needs alone are expected to increase by 22–27 percent between 2007 and 2035 (regnum.ru, casa-1000.org, September 17; www.isn.ethz.ch, July 18, 2011). These energy demand dynamics, coupled with economic development imperatives, potentially enable Central Asian states—endowed with vast energy resources—to become important economic and security partners for South and East Asian countries.

In this context, the CASA-1000 project is viewed as a critical initiative. It would allow Tajikistan and Kyrgyzstan to increase electricity exports, and help Afghanistan and Pakistan to develop their economies, which remain hostage to electricity shortages and blackouts. The CASA-1000 project and the potential it holds for advancing cooperation in other areas would further assist with development and integration of Afghanistan into Central and South Asia as well as facilitate the growing, albeit still slow, connectivity of the two regions. Besides promoting broader regional security by advancing economic opportunities, the inter-regional cooperation is expected to open new vistas of collaboration of the two regions with other parts of Eurasia.

The World Bank and other institutions have expressed interest in funding the project. Russia is also seeking a major role in the scheme, in part because of its concerns about Washington’s push for inter-regional projects under the US Silk Road Initiative, launched in 2011, which Moscow fears is intended to weaken Russia’s influence in what it considers its near abroad. Moscow therefore actively seeks to retain a major role in the regional geopolitics, especially considering the exit of Uzbekistan from the Russia-led Collective Security Treaty Organization (CSTO) for the second time in 2012 and Tashkent’s resistance to other Moscow-led integration initiatives in Central Asia. However, just as its ties with Uzbekistan worsened, Russia has increased its engagement with Kyrgyzstan and Tajikistan, including in the hydropower sphere. Potential investment by Russia in the CASA-1000 project and its deepening collaboration with Bishkek and Dushanbe provide Moscow with leverage over Central Asian states and enable it to remain a key player in the region.

Meanwhile, as a country dependent on Tajikistan and Kyrgyzstan for water and aiming to become a major exporter of electricity to Afghanistan, Uzbekistan has resisted efforts of its neighbors to develop their electricity export capacities, citing environmental issues that could result from expanded production of electricity by the upstream countries. Uzbekistan has been accused in the past of going as far as cutting gas supplies and blocking railway transit to signal its displeasure and frustrate the efforts of cash-strapped Tajikistan and Kyrgyzstan to develop their hydropower sectors. Tashkent has allegedly offered Pakistan to build three hydroelectric power stations on the Swat River as a way to discourage Islamabad from pursuing the CASA-1000 initiative (topnews.tj, September 19, 2011; gazeta.tj, July 19, 2012).

The CASA-1000 project has its opponents in participating countries as well, including in Kyrgyzstan where critics suggest to instead work with Russia, India and China, who have the financial resources and willingness to develop the Kyrgyz Republic’s energy sector. They argue that the completion of the “Dataka-Kemin” power communication lines and other similar projects would allow Kyrgyzstan to export electricity to Kazakhstan and China at higher prices. Such cooperation, the argument goes, is more profitable than collaborating with the poorer and unstable Afghanistan and Pakistan (24kg.org, September 26; January 23, 2012).

The CASA-1000 skeptics do have a point. Besides possible unmarked landmines along proposed routes of the transmission lines, CASA-1000 faces major security and geopolitical risks. Afghanistan may see more instability ahead of the country’s presidential elections and following the pullout of coalition forces in 2014, while Pakistan is almost certain to continue its struggle with home-grown militant groups and terrorism. Meanwhile, corruption and the porous borders of all these states have facilitated trans-border drug trafficking and organized crime activity that many fear will only grow. It therefore remains to be seen if economic justifications for CASA-1000 will trump security concerns come 2014 and, the September agreement notwithstanding, whether the project’s broad vision becomes a reality in the long run.