8
ISLAMABAD: Afghanistan has hinted that it may reduce the transit fee it wants to levy on electricity imported from Tajikistan and Kyrgyzstan through the proposed 1000-megawatt Central Asia-South Asia (CASA-1000) transmission line project.
This has raised hopes in Islamabad, where policymakers were concerned by recent offers made by Moscow to its former central Asian states to buy out all surplus energy because Kabul’s exorbitant demands for transit fees were becoming an irritant for Tajikistan and Kyrgyzstan, despite all possible support by the United States and the World Bank.
A senior government official told Dawn that in a couple of recent interactions with Finance Minister Ishaq Dar, both the Afghan ambassador in Islamabad and the Afghan finance minister gave clear indications that Kabul was ready to show flexibility.
Kabul had been demanding 2.5 US cents per unit as transit fee for the delivery of Central Asian electricity to Pakistan, a demand considered ‘unreasonable and unrealistic’ by Islamabad.
Pakistan had offered to pay 0.56 US cents per unit to Afghanistan, according to World Bank estimates. But in the interests of moving the project along, Finance Minister Ishaq Dar is reported to have conveyed: “As a goodwill gesture towards a friendly neighbour, we can go up to 0.99 cents per unit but will not cross one cent per unit,” an official privy to the communication told Dawn.
The official said Afghanistan’s response was very encouraging as it signalled willingness from their side to move things forward. The Afghan side, he said, was appreciative of the Pakistan’s overtures, including the Pak-Afghan Transit Trade, and admitted that it was time for Kabul to reciprocate.
Energy and economic affairs officials from both sides were directed to follow up and technical teams are expected to meet soon. But a final decision could be announced after the new Afghan president takes office in a few weeks.
Also read: Pakistan, Tajikistan agree to strengthen cooperation
This move comes as Pakistan and Tajikistan agreed on a sale purchase rate of 5.1 cents per unit under the CASA-1000 project during a recent visit there by Prime Minister Nawaz Sharif. Buying electricity from Central Asia suits Pakistan because it can feed Pakistan’ struggling power grid during the summer months when demand is the highest.
Originally, Tajikistan had also sought 3.5 cents per unit but then increased their asking rate to 7 cents per unit. Finally, the deal was closed at 5.1 cents per unit.
Peace in Afghanistan continues to remain a major challenge to the project because a major part of the transmission line has to pass through troubled parts of Afghanistan. The World Bank approved the CASA-1000 project, offering $120 million, out of a total loan of $552 million, for the laying of transmission lines in Pakistan.
The total cost of the project is estimated at $1.16 billion and major financiers include the Islamic Development Bank and other donors.
According to the World Bank, the Central Asia-South Asia Electricity transmission and Trade Project (CASA-1000), will cost $820 million and alleviate power supply shortages in South Asian countries while enhancing revenues in Central Asian states.
The World Bank group will provide $510m for the project; the Islamic Development Bank $280m; and bilateral agencies $30m.
According to details, the high voltage direct current (HVDC) transmission lines are expected to commence from Sangtuda in Tajikistan and will pass through Kunduz, Pul-i-Khumri, Kabul and Jalalabad in Afghanistan and end up in Peshawar.
The total length of the transmission lines is estimated to be 750km, 16 per cent of which passes through Tajikistan, 75 per cent through Afghanistan and 9pc through Pakistan.
Published in Dawn, July 7th, 2014
