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India’s steel and power project in Afghanistan still on

in Afghan Business

India’s steel and power project in Afghanistan still on

Reports began to circulate last month that the Afghan Iron and Steel Consortium (AIFSCO), led by the state-owned Steel Authority of India Ltd. (SAIL), after years of apprehension about the project has pulled out from the project altogether.

According to India’s Economic times, the project is “officially on” and has been put in “cold storage” due to several issues; security being a major one.

India’s Ambassador to Afghanistan Amar Sinha has also denied reports that the project was scrapped.

“Not correct. Meeting only did a SWOT analysis of opportunities and strengths. No decision of this sort,” the Ambassador tweeted.

The Consortium had received three high-grade Hajigak iron ore mines in Bamiyan province , which was meant to be the biggest foreign investment proposal by Indian firms. The Consortium had planned to carry out the project in phases including a 6.12mn ton steel plant, an 800 MW power facility, create infrastructure for mine development and necessary infrastructure at a cumulative investment of a USD 10.8bn over 11-15 years.

Following some militant attacks including the one on Indian consulate in Herat and SpiceJet plane at Kabul airport, the Consortium decided to cut down the investment plan by 75% to just USD 2.9bn.

The members of the Consortium started losing hope in the project after years of delay and security concerns.

Besides SAIL, other members of the consortium include state-owned NMDC and RINL and private sector steel players — JSW, JSW Ispat, Jindal Steel and Power, and Monnet Ispat and Energy. SAIL has the maximum 20 per cent stake in the venture, while NMDC and RINL hold 18 per cent each. Private players JSW Steel and JSPL hold 16 per cent each, while JSW Ispat and Monnet have 8 per cent and 4 per cent stakes respectively.

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