Pakistan and Afghanistan have signed an agreement on electricity transit fee, taking an important step forward for energy trading between Central and South Asia. The agreement was signed during the annual meetings of the World Bank and the IMF in Washington, DC by Finance Minister Ishaq Dar and the Minister of Finance and National Economic Adviser for Afghanistan, Omar Zakhilwal, says a press release issued here on Saturday.
The Pakistani side negotiated the price bringing it down from the initial asking price of 2.5 cents to 1.25 cents per kW. It helps to establish the commercial arrangements for 1,300 MW of sustainable regional electricity trade between Kyrgyz Republic, Tajikistan, Afghanistan and Pakistan as part of the Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000).
"Now that we have agreed on a transit fee for the electricity, I hope we can move forward quickly on this transformational project," Dar said. "We are ready to realise the CASA-1000 vision and improve energy security and trade for our countries and region," said Omar Zakhilwal, Minister of Finance for Afghanistan and National Economic Advisor.
CASA-1000 will build more than 1,200 kilometres of electricity transmission lines and associated substations to transmit excess summer hydropower energy from existing power generation stations in Tajikistan and the Kyrgyz Republic to Pakistan and Afghanistan. To oversee the complex, four-country process, an Inter-Governmental Council has been established to supervise the design and implementation of the project. In March 2014 for the World Bank Group approved financing for the engineering design, construction and commissioning of transmission lines and three new converter stations. The project would build upon existing power generation stations that will provide the energy to be traded over CASA-1000.
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. CASA-1000 will enable the development of the Central Asia South Asia regional electricity market.-PR
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