Import of electricity: government steps up talks with Iran and India

Pakistan has expedited negotiations with India and Iran to import 1500 MW electricity aimed at eliminating power shortfall as early as possible, official sources told Business Recorder.

A team of experts of Water and Power Ministry headed by Sohail Akbar Shah, Additional Secretary Water and Power has reached New Delhi to discuss formalities of importing 500 MW electricity. Other members of the committee are, Joint Secretary Water and Power, Zargham Eshaq Khan, Deputy General Manager (Finance (WPPO) and Waseem Younis, Manager (Power Planning) NTDCL. The Indian side will be headed by Jyoti Arora, Joint Secretary.

Federal Cabinet recently approved a Memorandum of Understanding (MoU) to import electricity from India.

A two-member delegation will also visit Iran from 17-18 March 2014 to finalise the agreement on the import of 1000 MW electricity. The delegation will comprise Additional Secretary Water and Power, Sohail Akbar Shah and Managing Director, NTDC, Zia-ud-Din.

The project was conceived pursuant to a Memorandum of Understanding (MOU) signed by Minister of Water & Power, Pakistan and Minister of Iran on 8th April 2007 in Tehran. The salient features of the feasibility study conducted by MOSHANIR (Iran) and NESPAK (Pakistan) during 2009-2010 are: (i) HVDC interconnection on + 500 kV level and converter and switching stations at Zahedan and Quetta; (ii) total length of the transmission line is 678 KM, out of which 93 KM will be in Iran and 585 KM will be in Pakistan; (iii) Iran to construct a dedicated 1300 MW power plant at Zahedan; and (iv) the total estimated cost of transmission line project is $700 million.

A delegation led by former Managing Director, NTDC, visited Tehran in June 2012 and signed an MoU with TAVANIR, Iran, which includes the negotiated tariff.

The salient features of the MoU are: (i) the cost of HVDC interconnection project is estimated to be approximately $700 million excluding the cost of 1300 MW power plant which is to be constructed in Iran; (ii) TAVANIR consented to finance the HVDC Interconnection Project cost in its own territory (approximately $265 million); (iii) the parties agreed to finance the HVDC interconnection project for Pakistani side (approximately $435 million) as follows: (a) seventy percent which is approximately $300 million will be arranged and financed by Iranian financial institutions; and (b) thirty percent which is approximately $135 million will be financed by Pakistani financial institutions.

It was agreed that the price of electricity for an initial period of five years from COD will remain 8.00 to 11.00 cents/kWh depending upon the price of crude oil, which will remain within the limits of $78.57 per barrel and $121.43 per barrel.

The Board of Directors, NTDC, in its meeting held on October 03, 2012 accorded its approval. Thereafter, the Ministry of Water and Power has been requested along with a draft of ECC summary vide letter dated 25-10-2012 followed by reminders dated 10-12-2012 to obtain GoP approval prior to approaching NEPRA for determination of tariff agreed in MoU. GoP approval is awaited.

Federal Cabinet is expected to approve the MoU with Iran on import of electricity in its forthcoming meeting. The Pakistani delegation will also discuss progress on transmission line for the import of 100 MW electricity for bordering areas of Balochistan.

By Business Recorder


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