ECC approves 74MW import from Iran, launch of Sukuk Bond

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved the import of 74MW electricity from Iran by reducing its tariff and decided to launch the Sukuk Bond on the international market to fetch $500 million to $1 billion during the current fiscal year.

The ECC, which met under the chairmanship of Finance Minister Ishaq Dar, also scaled down the tariff for import of electricity from Iran.Earlier, the tariff was proposed at 7.5 to 10 cents per kwh but now the ECC has scaled down the tariff to 6.1 to 9.5 cents per kwh.

Pakistan was already importing electricity through the Taftan area by linking it with Balochistan and now 74MW will be added to the system.Both the countries had been negotiating this deal for the last several years but it could not be materialised due to economic sanctions on Iran. On a summary moved by the Finance Division, the ECC authorised the Habib Bank Limited to open a bank branch in Urumqi, China, with investment of $50 million out of which $30 million would be raised by Pakistan.

The remaining $20 million would be raised through other avenues, including China.An official statement issued by the Finance Ministry after the ECC meeting said Federal Minister for Finance Senator Mohammad Ishaq Dar chaired the meeting of the Economic Coordination Committee of the Cabinet here at the Prime Minister’s Office.

The committee approved a summary moved by the Ministry of Water and Power for allowing the NTDC (National Transmission and Dispatch Company Limited) to approach the Nepra for approval of extension of tariff from 1st January 2016 to 31st December, 2016 for a contract with TAVANIR, Iran, for the purchase of 74MW.

The ECC approved a summary of the Ministry of Water and Power for issuance of a policy directive to Nepra to allow 1pc of the capital cost net of aforementioned $150,000 amount on account of security to be distributed annually starting from the construction period till the term of the Power Purchase Agreement.

The ECC allowed the Finance Division to issue sovereign Sukuk on the international capital markets.The sources said its pricing and exact size would be determined keeping in view the appetite of the market at that time. The ECC reviewed the macro economic indicators and noted that the CPI inflation was estimated to be 3.56 percent in August 2016 compared to 8.55 percent in August 2013 and 11.56 percent in August 2011.

Furthermore, the ECC was informed that there was sufficient wheat stock in the country, which stood at 9.49 million tons on September 20, 2016, compared to 8.75 million tons in the corresponding period last year. The ECC was also apprised that Large Scale Manufacturing (LSM) increased by 3.2% in FY 2015-16.