Afghanistan will receive a grant worth $1.2 billion (£0.78bn) to improve its energy sector.
The cash aims to support projects in the country which boost energy supply, cross border trade and improve the power sector’s efficiency.
The Asian Development Bank (ADB) is providing the fund which will be given in tranches until 2025.
Afghanistan’s reliance on energy imports, limitations in transmission and distribution networks and financing weaknesses leave energy security highly vulnerable, the ADB added.
Asad Aleem, Senior Energy Specialist in ADB’s Central and West Asia Department said: “Insufficient energy supplies and a demand supply imbalance constrain growth and income opportunities and create economic disparities that can fuel ethnic and regional tensions and insecurity.
“This assistance will support the government’s national energy supply programme of more than $10 billion (£6.5bn), which aims to expand power supply to boost economic growth and cut poverty.”