Pakistan signed an agreement with Afghanistan Saturday on electricity transit fees as Finance Minister Ishaq Dar described it a major step towards closer partnership between the two countries with transmission of Central Asian energy to Pakistan.
World Bank President Jim Yong Kim and US Special Representative for Afghanistan and Pakistan Dan Feldman witnessed the signing ceremony at the World Bank headquarters.
“It’s a win-win for both the countries,” Dar said, as Prime Minister Nawaz Sharif’s government successfully concluded the negotiations with Afghanistan on reaching an accord on 1.25 cent per KW transit fee for supply of Central Asian electricity to Pakistan through Afghan territory.
The accord, welcomed by the WB President King as a success towards meeting Pakistan’s power requirements, helps to establish the commercial arrangements for 1,300 megawatts (WM) of sustainable, regional electricity trade between Kyrgyz Republic, Tajikstan, Afghanistan and Pakistan as part of the Central Asia South Asia Electricity Transmission and Trade Project, known as CASA-1000.
Finance Minister Dar expressed appreciation for the World Bank, the US State Department and USAID for their support for the landmark project.
“This marks a new beginning towards greater economic cooperation between the two countries – and Pakistan is committed to greater economic and trade cooperation with Afghanistan,” which just had a new government in Kabul, Dar said.
Pakistan’s Ambassador to the United States Jalil Abbas Jilani, State Bank of Pakistan Governor Ashraf Mahmood Wathra, Additional Secretary External Finance Shahid Mahmood attended the ceremony.
For his part, Afghan Finance Minister Omar Zakhilwal said Afghanistan was ready to realise the CASA-1000 vision and improve energy security and trade for the two countries and the region.
Meanwhile, Ambassador Jilani also said that the agreement marked an important achievement towards meeting Pakistan’s exponential energy requirements. “This is another vital step following US support for Diamer Basha Dam to realise energy availability for Pakistan.”
The CASA-1000 will build more than 1,200 km of electricity transmission lines and associated substations to transmit excess summer hydropower energy from existing power generation stations in Tajikstan and the Kyrgz Republic to Pakistan and Afghanisan.
To oversee the complex four-countries process, an inter-governmental council has been established that will supervise the design and implementation of the project.
In March 2014, the World Bank Group approved financing for the engineering design, construction, and commissioning of transmission lines and three new converter stations. The project will build upon existing power generation stations that will provide the energy to be traded over CASA-1000.
The commercial and operating framework for CASA-1000 is specifically based on “open access” principles that will allow additional energy supplying countries to connect with wider regional transmission networks.
The CASA-1000 will enable the development of the Central Asia South Asia Regional Electricity Market (CASAREM) – a long-term plan for regional energy trade.