Pakistan and Iran closer to sign electricity deal

[LahoreEstate]

MUSHTAQ GHUMMAN
ISLAMABAD (April 05 2009): Pakistan and Iran are reportedly closer to an agreement over the much delayed electricity deal, envisaging export of 1000 MW electricity to Islamabad via Balochistan, official sources told Business Recorder on Saturday.

Both the countries explored avenues of electricity trade at ministerial level moot held on December 29, 2008 in Islamabad, but the signing of an expected pact had been postponed because the representative of Iran Export Development Bank failed to arrive due to unknown reasons.

According to the proposed agreement, deliberated between the Minister for Water and Power Raja Pervez Ashraf and Iranian Energy Minister Engineer Parviz Fattah, Iran will extend credit facility of 55 million dollars to lay 70-kilometre transmission line.

"One of the major hurdles was selection of arbitration place and rules and now we have agreed to follow Iranian arbitration rules rather than French rules," sources close to Economic Affairs Division (EAD) Secretary. Pakistan is currently importing 40 MW from Iran for coastal areas of Balochistan.

100 MW for Gwadar port, for which an agreement has already been signed, is enhancing the import of power. However, progress on the project has been too slow and both the parties were accusing each other of not proceeding at the required pace. "We have conveyed our consent to Iran and hope that the agreement will be inked shortly between Iran and National Transmission and Dispatch Company (NTDC)," the sources said.

Iranian delegation was briefed by the Ministry of Water and Power authorities on the current power situation, short, medium and long-term measures being taken by Pakistan to bridge the gap between demand and supply, future plans to inject more electricity in the national grid to end the energy crisis and the potential projects being offered to the investors in the coal, hydro and renewable energy sectors.

The salient features of the power policy and liberal incentives for private investors were also highlighted in the briefing. "Iran will be extending credit of 55 million dollars to NTDC/Pepco for construction of transmission line in Pakistan (70 kilometres). The remaining 50-kilometre on the Iranian side will be constructed by Iran, which will be made part of the tariff," the sources continued.

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