Country Report Afghanistan January 2011

Economic policy: TAPI framework agreement is signed

On December 11th a framework agreement was signed by the presidents of Turkmenistan, Afghanistan and Pakistan, as well as India's energy minister in Ashgabat, the capital of Turkmenistan, for the TAPI natural gas pipeline, which would run from Turkmenistan to India with a total length of 1,700 km. It is only a framework agreement, and details about security and funding for the pipeline have not yet been finalised. The pipeline would run through parts of Afghanistan where security is still very poor; the project will therefore face significant obstacles in implementation. The project was costed at around US$3.3bn, but some estimates suggest that the final cost could be as high as US$10bn. The project is supported by the Asian Development Bank, although the US also supports TAPI as a counterweight to another proposed pipeline between Iran, Pakistan and India. (The US opposes the latter proposal on political grounds.)

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