ISLAMABAD: In a major development, Taliban regime has decided to honour all pacts related to Central Asia-South Asia-1000 (CASA-1000) project signed by the previous Afghan government, aimed at becoming part of efforts to revive the stalled four-nation electricity trade project, well informed sources told Business Recorder.
The project had been facing a delay of two years as the World Bank and USAID decided to withdraw their funding after regime change in Afghanistan.
The sources said, Ministry of Foreign Affairs, Afghanistan has referred to a letter of Finance Ministry of Afghanistan, which states CASA-1000 signed contract (grant No; H-927-Af), which is financed through the World Bank’s free aid, will end on March 31, 2023.
Afghan Ministry of Foreign Affairs has confirmed that only 72.6 per cent of implementation of the project has been completed whereas 27.4 per cent of the work has been delayed as it is a joint project of four countries: Afghanistan, Pakistan, Kyrgyzstan and Tajikistan.
CASA-1000: WB, USAID withdraw funding
World Bank recently announced in an informal meeting with the Ministry of Finance of Afghanistan that the extension in contract of CASA-1000 is conditional on a joint proposal from the four countries, the sources quoted Afghan Foreign Ministry as saying.
According to sources, Afghan Ministry of Foreign Affairs has conveyed its assurance to the member countries that all the agreements signed by the former Afghan government on CASA-1000 project stand valid and applicable.
Foreign Affairs Ministry of Afghanistan has also assured participation of Afghanistan in the meeting for implementation and coordination of CASA-1000 to be arranged before expiry of the contract.
At a recent meeting held in Pakistan’s Ministry of Economic Affairs on CASA-1000 project, all issues related to the project came under threadbare deliberation.
NTDC/ CASA officials gave a presentation on the project, which covered the geographical spread and updated progress of the different sections of the project implemented in Tajikistan, Kyrgyzstan, Afghanistan and Pakistan. The project, after completion, would provide a transmission line to transmit electricity from Kyrgyzstan across Tajikistan and Afghanistan to Pakistan.
A study is also being conducted by M/s Hitachi to look into the option of flow of surplus energy from Pakistan to the Central Asian Republics in the winter season.
Regarding progress, the forum was informed that with respect to Pakistan physical progress on converter station is 74.4% and transmission line is 67.3 %, highlighting the progress to be 7% ahead.
The meeting was informed that in Afghanistan, the project is at a halt due to withdrawal of funds/ non-extension of grant amounting to $245 million by the World Bank, after regime change in Afghanistan, causing delay in the completion of the project.
The forum was further informed that USAID has also withdrawn its funding meant for meeting the expenses of CASA-1000 secretariat, which is another major setback to the project.
The meeting was informed that the different issues faced by the project including those of funding would be discussed in the JWG and then at IGC for a viable and mutually agreed solution.
The progress regarding foundations for towers, installation of towers and transmission line and land acquisition were discussed in detail. The representative of NTDC noted that for 113-km length of transmission line, a total of 376 towers are to be installed within the boundaries of Pakistan (Nowshera to Torkham border). Out of these 376 towers, foundations for 320 towers have already been laid, whereas 300 towers have been erected.
The meeting was informed that the project is delayed by at least two years and discussions are under way with the World Bank for extension in the project period from March 2023 to December 2025. The loan component of IsDB also needs to be extended beyond June, 2023, for which a request is being made to IsDB. Similarly, request for additional financing of $ 7.5 million is also under process.
The Chief Engineer CASA-1000 flagged the risk of payment of idle charges to the contractors employed by NTDC, if the project is not completed and tested timely due to the situation in Afghanistan. The forum was further informed that the World Bank had asked the other participating countries to work out a loan arrangement for Afghanistan to complete the work.
He maintained that this option seems viable but may not be feasible for Afghanistan as it would be a shift from grant to loan. This issue would also be discussed in the upcoming meetings of JWG and IGC.
Chief Engineer CASA-1000 noted that a request has been made to the World Bank to either waive off the interest on the $185 million loan for Pakistan or convert it into a grant since the project delay is due to the situation in Afghanistan. He further stated that a revised PC-1 would be submitted for the approval of ECNEC once decisions are made in the JWG/IGC.
Copyright Business Recorder, 2023
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