CASA’s promise

Published June 27, 2016

THE latest decision by Nepra to approve the power purchase agreement for the import of electricity from Kyrgyzstan is another step towards the realisation of a path-breaking project for Pakistan. The Planning Commission had aired some reservations a year ago when the project was going through the process of government approval, but the fact that it remains on track is good news for the country. Those reservations included a higher transit fee for Afghanistan than had been originally anticipated, and a tariff that is more than what Afghanistan pays for importing electricity through similar arrangements with its neighbours. It is entirely proper for the Planning Commission to have shared its thoughts on the matter at that time, but it is important to bear in mind that it nonetheless granted its approval for the project, which enjoys the backing of the government. The tariffs that Afghanistan pays for its power import from neighbours cannot be compared to what Pakistan is being asked to pay under CASA 1000 because those are not commercial arrangements. Afghanistan is basically being provided power at concessional rates as assistance, and the donor community plays its role in helping make the payments. Pakistan should not seek power on concessional terms since its situation is not comparable to the one prevailing in Afghanistan.

The overall project to build a transmission line carrying 1,300MW of electricity from energy-surplus countries in Central Asia to Pakistan carries tremendous promise for the latter. With the passage of time, the same arrangements can be broadened to include other countries, build more branches from the first transmission line, and perhaps move towards a regional market in electricity at some point in the future. Plans also exist to lay an additional 500km of transmission line from Kyrgyzstan, where the power will originate, to Kazakhstan which has substantial LNG-based power surpluses as well. This will ensure that the transmission line envisioned under CASA 1000 can become a year-round source of supply, instead of only six months out of the year as it currently is since it is based on hydro surpluses. Once that happens, the tariff can actually come down further. Security remains the single largest question mark hanging over the project, but if the sponsors and the countries concerned are willing to work on lessening these risks, the grounds for objection by other parties will disappear. The project should be advanced on a fast-track basis.

Published in Dawn, June 27th, 2016

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