LAHORE: Iran has offered another 3,000MW electricity to Pakistan, in addition to 1,100MW for which the previous government had signed an agreement (100MW) and an MoU (1,000MW), and invited officials of the Ministry of Water and Power to visit Iran in the third week of the current month to firm things up.

In a letter to the National Transmission and Dispatch Company (NTDC), the Iranian government has offered “to create milestones (during the visit) for export of 1,000MW power to Pakistan and also investigate the opportunity of supplying approximately 3,000MW more power”.

Also read: Crisis brings down power generation by 2,000MW

The letter pledges to increase Jakigur (in Iran) substation from 80MVA to 125MVA for creating capacity for additional supplies to Pakistan and extend validity of the current electricity sale agreement and revising its tariff (of roughly 75MW, which it is supplying to some areas of Balochistan).

“This is an opportunity that should be grabbed,” says a former head of the NTDC, who has been part of previous negotiations. The other options, which Pakistan is exploring for import of power, are Central Asia and China. In both cases huge security risks and difficult terrains make these projects almost next to impossible undertakings. Under the circumstances, he added, the Iranian option remained cheapest, quickest and relatively hassle-free.

Pakistan was able to sign previous deal at around eight cents (around Rs8) per kilowatt, even if oil prices go up to $120 per barrel. With oil prices now having fallen almost 30 per cent of that upper limit, the deal, if properly negotiated, could perhaps be inked at half of that price. “Compare it with Pakistan’s own generation with furnace oil, costing at over 20 cents per unit. On top of it, Pakistan would neither have to invest on generation nor take the environmental impact,” the former NDC chief said.

“In case of 100MW for Gwader Port contract, signed in 2007 and is still in a limbo, the price per unit was only 6.25 cents,” explains another former head of the NTDC. Pakistan needs to explore its backyard before jumping across the countries and regions for import of energy. “Luckily, Pakistan is doing what the west wanted it to do on the terrorism front. It is time to take some independent decisions on the energy front and the rest of the world will understand its increasing complications on this front.

“With over 4,000MW cheap electricity, the entire economic paradigm can change; it will save around six billion dollars in initial investment, even if $1.5 million to a megawatt ratio is taken as a benchmark. Though Iran has consistently been offering such deals, Pakistan has, so far, failed to grasp them — for different international and national reasons. It signed an agreement for 100MW in 2007. It signed a memorandum of understanding for 1,000MW in 2012. In 2015, Iran is inviting a Pakistan team to negotiate for another 3,000MW. The opportunities need to be fully explored and grasped.

“Had Pakistan built transmission lines on its side of border (Iran agreed to build on its side and deliver power at the border) in 2007, by now it could have easily increased supply and reduce loadshedding by at least 50 per cent with over 4,000MW of chea­per power,” he concluded.

Published in Dawn, February 11th, 2015

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