Electricity purchase from Iran: Millions of Euros to be paid to three Pakistani companies as barter

Pakistan is to pay millions of Euros to three Pakistani companies in equivalent Pak Rupees as barter against electricity purchase from Iran, well informed sources in Commerce Ministry told Business Recorder.

The outstanding amount of Iranian Electricity Company M/s Tavanir ranges between $120-130 million.

Pakistan started import of 100 MW of electricity from Iran in 2002. Since start of electricity supply, CPPA-G/ NTDC was paying due amount to Tavanir through regular banking channel. In 2011 due to non availability of normal banking channels, CPPA-G was not in a position to make payments to the Iranian company which is supplying electricity to bordering areas of Balochistan.

The issue of payment was discussed in almost each meeting and specifically on March 15, 2019 between (CPPA-G) Power Division, Ministry of Commerce, Ministry of Finance, State Bank of Pakistan and M/s Tavanir in Islamabad wherein a barter arrangement was discussed and it was decided that CPPA-G will make payments to the parties nominated/ authorized by Tavanir and Ministry of Commerce will devise a mechanism for barter exchange.

Resultantly, CPPA-G is receiving payment orders/ letters in the name of multiple parties i.e. White Pearl Rice Mills, Trans Trade Global Ltd and Arian Mehraab Grosier Company Ltd.

On November 8, 2019, Iranian embassy in Islamabad wrote a letter to Commerce Ministry, citing the minutes of meeting held on March 15, 2019 between Tavanir Co and Power Division and introduced Trans Trade Global Company of Pakistan for payment in favour of the company.

The embassy also requested Commerce Ministry to notify the matter to the Energy Power Division Finance Division, Revenue Division, State Bank of Pakistan and Central Power Purchasing Agency-Guaranteed (CPPA-G).

In another letter to CEO, CPPA-G Abid Lodhi, it was stated by the Iranian side that the contract for purchasing rice between Government Trading Corporation of Iran (GTC) and Trans Trade Global Company of Pakistan for an amount of Euros 18.675 million has been finalized.

Lodhi was requested to make payment in favour of Trans Trade Global Company, subject to shipment of rice and Bill of Lading (B/L) submitted to GTC by Trans Trade Global Company as well as issuance of the request letter for payment to GTC from Tavanir in favour of three rice sellers.

On December 13, 2019, Chief Financial Officer (CFO) of CPPA-G wrote a letter to the Power Division along with the request of M/s White Pearl Mills Limited to take up the matter with the State Bank of Pakistan for regularization of payment adjustment against export of rice under a barter trade system.