Besides improving the trade connectivity within South Asia and across Central Asia, policymakers and academia at home are seen to have been advocating regional cooperation in energy trade. For all the obvious reasons, one such project is Central Asia South Asia (CASA1000) joint electricity transmission projects between Pakistan, Afghanistan, Tajikistan and Kyrgyzstan.
Based on the premise of energy trade with Central Asian countries, CASA1000 is seen as an important way of invigorating bilateral trade with the immediate neighbour Afghanistan. While the supporters of the project envision the beginning of an era of power sharing with increased potential and a much needed infrastructure in place, there are many lacunas that take CASA1000 away from successful completion; some of them also mentioned at SDPIs conference on Trans-Boundary Cooperation in Energy Sector.
Firstly, CASA1000 will not be able to solve the energy crisis of South Asian countries completely; the project entails only 1,300MW of electricity that won be available until late 2019-20.
Also, project like these have international diplomatic repercussions. Therefore, it also requires a change in foreign policy.
The Central Asian countries resource-sharing mechanism is gradually moving towards focusing on the external markets, which is a good sign for the South Asian energy market as it is one of the external markets. However, one should not forget about other competitors in the region, hungry for energy. For all the right reasons, Chinas involvement in the Central Asian energy sector makes China a major competitor of Pakistan for energy from Central Asia. The Chinese government has recently announced its plans to build ultra-speed transmission lines connecting its western part to the eastern part, which requires surplus energy that might just come from Central Asian countries like Turkmenistan, Tajikistan and Kyrgyzstan.
Those who find CASA1000 optimistic do not see financing of the project a problem. According to them improving prospects of Afghanistan has rejuvenated the investment case of this project. However, adversaries have difficult time in figuring out who will take the cost of building CASA1000? The cost of the project is estimated to be close to $1 billion. Certainly, South Asia cannot take this cost; ADB has left CASA1000, and though multilateral donors like World Bank are willing to invest, it might just not be enough.
Another issue reiterated at the regional conference is that even if this transmission line is constructed, there might not be electricity enough to be transmitted. The electricity production in Tajikistan and Kyrgyzstan slightly exceeds the domestic production and that too only during the summer times. In order to make this project a reality, construction of large hydro-power projects is crucial in Central Asia, which is a very sensitive issue in itself, in the water-energy context.
Lastly, the security situation in Afghanistan and FATA, and the kind of policy changes that would be required to be able to get electricity from Central Asia remain crucial and unanswered.
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