Pakistan seeks changes in CASA-1000 deal

September 22, 2019

TASHKENT: Pakistan has formally asked Tajikistan to invoke the open access clause in the agreement under CASA- 1000 project paving way for two way trade of electricity, as under the existing deal,...

Share Next Story >>>

TASHKENT: Pakistan has formally asked Tajikistan to invoke the open access clause in the agreement under CASA- 1000 project paving way for two way trade of electricity, as under the existing deal, Pakistan is bound to import 1,000MW electricity per day at 9.50 cents per unit in summer season from May to October once this project comes into stream.

Pakistan will also not bear the electricity transit loss in Afghanistan in case of any subversive activity in Afghan territory. Under new scenario, Pakistan is now surplus in electricity and wants to export it to the Kyrgyz republic, Tajikistan and Afghanistan in winter season by using the same structure of CASA project.

Additional Secretary Power Division Waseem Mukhtar, who is representing Pakistan in CAREC countries’ two days conference ‘Breaking the Investment Barrier in Central Asia’, said while talking to The News that in next meeting of the countries involved in CASA project, Pakistan will take up the issue and ask electricity supplier countries -- Kyrgyzstan and Tajikistan -- to review the deal under open access clause ensuring the two-way electricity trade arguing that Pakistan is now surplus in electricity. CASA secretariat has included the issue of change in agreement flagged by Pakistan in the agenda of next meeting.

The project will be completed with the cost of $1.17 billion and apart from transmission line, converter stations will be constructed each in Tajikistan, Afghanistan and Pakistan. In Pakistan, at Nowshera, the land is being acquired for setting up a converter station.

When asked if the decision to import electricity from Tajikistan was rationale knowing the fact that hydro electricity generation in Pakistan has increased by over 9,000MW and many more hydropower projects are in the line and in to to the installed capacity of Pakistan to generate electricity has increased to over 34,000MW showing Pakistan is in surplus with electricity, Mukhtar responded that when Pakistan entered into agreement with Tajikistan and other countries under CASA project, the country was facing acute electricity crisis. He said the Word Bank had drafted the agreement signed by all countries involved in this project.

“We cannot abandon the project unilaterally as sovereign guarantees are involved and Pakistan cannot afford to face penalty in dollars in case any aggrieved party moves the international arbitration,” he said. However, he said, if Pakistan is not provided electricity on time during the period from May to October then Pakistan will penalise the electricity supplier countries.

Asked if Pakistan’s financial liability starts when Tajikistan provides electricity in national grid in Peshawar, he replied in the affirmative. When he was further questioned if Pakistan will bear the transit electricity loss in Afghanistan in the wake of any subversive activity, he said that all such issues must have been covered in the agreement.

The project would include a 750 kilometres high voltage direct current (DC) transmission system between Tajikistan and Pakistan via Afghanistan, together with associated converter stations in Sangtuda (1,300MW), Kabul (300MW) and Peshawar (1,300MW). A 477km 500KV alternating current facility would also run between the Kyrgyz Republic (Datka) and Tajikistan (Khoujand). System upgrades would also be required to safely and reliably accommodate the AC and DC facilities and the associated power flows. The CASA-1000 transmission line to Peshawar would be capable of delivering 1,300MW -- 1,000MW to Pakistan and 300MW to Afghanistan. However, officials suggest that Afghanistan’s share may be available to Pakistan as Kabul may not need the power in the near future.

The estimated cost of the project is $1.17 billion, including $208 million interest, during construction and taxes, but the final cost will be determined through a competitive bidding process beginning next month. This includes the estimated cost of $232 million required for the Pakistan portion of the DC transmission line and convertor station. The tariff components of the project involve transmission tariff for paying back the investment, operations and maintenance cost, and two special funds for community support and common funds. The transmission tariff has been estimated at 2.98 cents per KWH, energy tariff at 5.15 cents per unit and the Afghan transit fee of 1.25 cents per unit. In addition, a transit fee of 0.1 cent per unit will also be paid to Tajikistan for the flow of Kyrgyz energy, while the option for non-member countries to inject energy at 1.5 cents per unit has been kept open. The CASA-1000 will be implemented as a contractual joint venture in which all four participating countries will own parts of the project located in their respective areas.

High voltage direct current transmission lines are expected to commence from Sangtuda in Tajikistan and will pass through Kunduz, Pul-e-Khumri, Kabul and Jalalabad in Afghanistan and end up in Peshawar.

More From Pakistan