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Tuesday, 17 September 2013

Pakistan, Afghanistan to import electricity from Central Asia


Pakistan, Afghanistan to import electricity from Central Asia

Pakistan, Afghanistan, Kyrgyz Republic and Tajikistan sign resolution to initiate commercial negotiations for development of $1 billion 1227km transmission line for delivering about 1,000MW of electricity from the two Central Asian States to Pakistan.
Pakistan, Afghanistan, Kyrgyz Republic and Tajikistan sign an inter-governmental council resolution to formally initiate commercial negotiations for development of $1 billion 1227km transmission line for delivering about 1,000MW of electricity from the two Central Asian States to Pakistan.

The project -- Central Asia South Asia Energy and Trade Corridor (CASA-1000) -- is to be funded by the World Bank, Asian Development Bank, Islamic Development Bank, US State Department, US Agency for International Development (USAID), UK’s Department for International Development (DFID), Australian Agency for International Development and Japan International Cooperation Agency (JICA).

The resolution was signed by Water and Power Minister Khwaja Mohammad Asif, Kyrgyz Minister for Energy and Industry Artykbaev Osmonbek Mambet Janovich, Tajik Minister for Energy and Industry Gul Sherali and Afghan Minister for Energy and Water Mohammad Esmail Khan.

This will be followed by a Master Agreement, Power Purchase Agreements and a Coordination Agreement, which was updated by lawyers at the conference. They also discussed issues relating to financing, selection of developer and operator and finalisation of environmental and social assessment and a benefit-sharing plan for communities living along the transmission line corridor.

After the signing of the inter-governmental council resolution, the ministerial-level delegations began discussions on project structure and commercial principles.

The resolution required the four nations to negotiate commercial agreements, disclose environment and social safeguard measures and host public consultations within a month.

The parties resolved that a plan for benefit-sharing by communities during construction and operation would need to be developed in coming months. “We hope the vision for import of electricity from our Central Asian brethren will become a reality very soon,” Khwaja Mohammad Asif told reporters. He said the transmission line would be completed in three years.

“Electricity is already available in Tajikistan and Kyrgyzstan and about 1,000MW of that could be provided to Pakistan in peak summer once the transmission line is completed,” he said, adding that the good thing about the project was that the Central Asian states would have surplus energy when Pakistan faced shortages of up to 5,000MW in peak summer. The power production would drop at Tajik and Kyrgyz hydropower plants in winter and at that time Pakistan would be having sufficient energy at home because of lower demand, he said.

He said Pakistan had been assigned to arrange $200 million funding for the project while all other parties had sufficient funds to meet the requirement of the project. On top of that leading international lending agencies led by the World Bank are supporting the project and would be ready to meet any financing shortfall.

Afghan Minister for Energy and Water Mohammad Esmail Khan pointed out the importance of the project in establishing his country’s role as a viable transit country to connect Central Asian states with South Asian states and enhance its growth prospects at a critical time.

The ministers from Tajik and Kyrgyz republics welcomed the development and said the project had the potential of being a source of fiscal and power sector revenues for their governments.

The project is designed to transmit 300MW to Afghanistan and 1000MW to Pakistan through 500KV AC line of 477 km and 500KV DC line of 750 km. The average cost of energy at source, according to SNC-Lavalin, a project consultant of Canada – has been worked out at 1.75 US cents per unit while the levelised cost of transmission is estimated at five cents per unit. As such, the cost of electricity delivered in Pakistan comes to 6.75 cents per unit.

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