Afghanistan’s $10 Billion Energy Initiative and the Taliban

Executive Summary

This report examines the Taliban-led Afghan government’s decision to launch a $10 billion energy infrastructure project with Azizi Energy.

The initiative seeks to build 10,000 megawatts of electricity capacity in the next ten years to lessen reliance on imported energy and meet domestic needs. It also has political aims, such as increasing control within the country and seeking global acknowledgement.

The success or failure of this project will have a direct impact on regional stability, what foreign investors think, and the future economic direction of Afghanistan.

Key Takeaways

• The Taliban are leveraging infrastructure to acquire both domestic legitimacy and international recognition.
• Persistent security threats from ISKP and other groups could undermine infrastructure implementation.
• Regional actors may view Afghanistan’s energy ambitions as a potential source of stability or leverage.

Background Information

On August 2, 2025, the Afghan Ministry of Water and Energy and Azizi Energy, a private company owned by UAE-based Afghan businessman Mirwais Azizi, signed a Memorandum of Understanding (MoU). The agreement details a phased construction of energy facilities, starting with a 200-megawatt solar plant in Kabul, slated to be operational in eight months.

The entire project discussed with Azizi Energy intends to produce 10,000 megawatts of power using a combination of solar, wind, hydro, gas, and coal. Of this, 4,000 megawatts will meet household demand and the remaining 6,000 will support industrial activity.

Afghanistan presently depends on importing electricity from Iran, Turkmenistan, Uzbekistan, and Tajikistan, but most of the population lacks access to a central power grid. Despite its significant potential for renewable energy, the country’s energy infrastructure remains underdeveloped because of political instability and decades of conflict.

Mirwais Azizi, a leading Afghan businessman, is single-handedly funding the project and taking complete ownership of its execution. His investment represents a rare instance of private capital returning to Afghanistan under the Taliban, even without legal safeguards or reliable regulatory supervision.

Geopolitical Scenario

By prioritising a large infrastructure project, the Taliban aims to solidify their internal power and secure external approval. Internally, the project should build public support and show the Taliban’s ability to provide basic services beyond coercive control. It also frames energy as a key instrument of state power, which can reward supportive regions and extend governmental control into disputed areas.

The Taliban’s external goal is to show state functionality as a basis for gradual recognition, especially from regional powers with fewer Western diplomatic restrictions. Russia’s official recognition of the Islamic Emirate in July 2025 has given the Taliban a political opening. They present the energy programme as evidence of Afghanistan’s potential to be a credible partner in regional trade and infrastructure initiatives, particularly with China, Iran, and the Central Asian states.

Security remains the primary threat. The Taliban face regular attacks from the Islamic State Wilayat Khorasan (ISKP), whose operations continue across urban and rural zones. The National Resistance Front also maintains a small presence in the northern provinces.

Groups opposed to the Kabul government might target energy infrastructure to disrupt services and erode the Taliban’s legitimacy. Protecting these assets will necessitate long-range surveillance, quick response teams, and logistical capabilities that currently Afghanistan lacks.

Neighbouring countries are observing closely. Iran might view Afghan energy projects as a threat to its export market. China can maintain a cautious approach but could explore integrating into more extensive infrastructure corridors should the project continue. The Central Asian republics may assess future electricity cooperation if security conditions stabilise. In all cases, regional actors will watch the project’s progress as an indicator of Afghanistan’s credibility as an energy-producing state.

Indicators to Monitor

Progress on the Kabul solar plant within the stated eight-month timeframe.
Terrorist or local militants’ activities near proposed or developing infrastructure zones.
Movement of capital or personnel from the UAE-based Azizi Group into Afghanistan.
Statements or diplomatic signals from China, Central Asian republics or Iran on energy cooperation or concern.
Taliban announcements related to export arrangements or grid connectivity.

Conclusion

The Taliban’s $10 billion Afghan energy project suggests a strategy to integrate governance with political power consolidation. It aims to reshape Afghanistan’s economy and project a development-focused image to the world.

Insurgent risks, weak institutions, and investor insecurity are still major concerns. Monitoring project milestones, regional reactions, and the progress of operational implementation will allow observers to evaluate the project’s genuine strategic impact.