Supply to Gwadar: Iran invited to discuss additional 100MW electricity tariff

ISLAMABAD: Pakistan has reportedly invited Iranian Energy Minister Ali Akbar Mehrabian to discuss tariff of additional 100MW electricity, to be supplied to Gwadar, as Iran has sought revision in existing agreement for upward revision in tariff, well informed sources told Business Recorder.

Sharing the details, sources said, the matter of supply of 100MW additional electricity from Iran to Makran Division, Pakistan through 132 kV Polan-Gabd/Gwadar power transmission line is under discussion.

The project was suspended due to difficulties for quite some time and the two sides achieved success in June 2022 by agreeing to and signing amendments in the existing agreements to operationalise the first phase of project by construction of 29km transmission line till Jiwani which will help overcome electricity shortages in the area.

PM to inaugurate 100MW Iran-Gwadar power transmission project

The sources said the project is ready for inauguration as the transmission line has been constructed on Pakistan side and installation of necessary equipment by Iran side on the border has also been completed. The two sides are negotiating for finalizing tariffs for additional electricity to be supplied.

Recently, an Iranian delegation of M/s Tavanir, visited 132 KV Jiwani Grid Station with QESCO for technical review of the project. The delegation curtailed its visit schedule due to PIA flight cancellation and proposed meeting with CPPA-G in Tehran. Inter-connectivity with National Grid is expected this month.

“Iran wants to conclude new amendment number -9 to the existing electrical energy sales contract of November 6, 2002 with an aim to revise the electricity tariff,” sources added.

Presently, Pakistan is importing 74 MW of electricity from Iran for bordering areas of Balochistan, whose per unit cost is around Rs 25 per unit.

According to sources, Iranian side has proposed to revise the formula under which existing electricity is being purchased. To this end, Government of Pakistan is of the view that: (i) the current formula for electricity being supplied is applicable till December 2024.

Government of Iran may consider the same formula for additional electricity till that period and, in the meanwhile, both sides can negotiate and agree on the new pricing formula. Or, (ii) if it is imperative to revise the pricing formula for additional electricity at this point in time (e.g. to address the volatility of oil prices etc.), the same may be done, however, the prices may be capped to an upper limit of 10 Cents/kwh.

As per existing formula, the electricity is being sold to Pakistan within a range of6.10 - 9.5 Cents, kWh. Moreover, the current basket price of Pakistan electricity pool is in the range of less 10 Cents/ kWh.

According to sources, Minister for Power, has requested Iranian Energy Minister for his personal indulgence for favourable consideration of Pakistan’s proposals for earlier finalization of tariffs and operationalisation of the project.

Copyright Business Recorder, 2023