Electricity import from Iran to go up to 104MW

Pakistan seeks approval from Iran for negotiations for import of 1,000MW; Iran intends to export 3,000MW to Pakistan

ISLAMABAD: Electricity import from Iran will surge up to 104 MW from next week meaning by that Tehran will add 30 MW of electricity in Pakistan’s system. Currently, 74MW of electricity is being injected in the country’s system, a senior official at the Ministry of Water and Power told The News.

In 2002, Pakistan and Iran entered into a National Transmission Dispatch Company (NTDC) agreement for supply of electricity. Initially, the agreement was for 34MW which was further increased by 30MW. Now another 30MW of electricity is being inducted into the national grid in 2016 jacking the electricity import up to 104MW. The tariff of another 30MW being added from next week will be the same at five cents per unit.

“The financial transactions with Iran are being made in local currency against the import of electricity and still there is a backlog,” said the official. He said banking channels between the two countries are being established for future transactions. With the ease of economic sanctions earlier imposed on Iran, trade with Iran has been allowed in Euro currency, but Pakistan’s trade is being made in dollar which is why at present trade is being made with Iran based on local currency.

It is pertinent to mention that Iran has already extended an offer of exporting 3,000MW of electricity to Pakistan. However, Pakistan seeks time for power purchase agreement (PPA) for import of 1,000MW of electricity as has been allowed by Nepra with tariff in the range of 8-11 cents per unit, but still there is no response from the Iranian side. There will be no revision in the tariff in case the price of crude oil remains up to $145 per barrel. However, in case the crude oil price exceeding $145 per barrel during the term of the contract, both parties will negotiate and agree to revise the tariff with mutual agreement.

A soon as the Iranians agree for the PPA negotiation, Pakistani experts team will start negotiations. In addition, both the countries have also signed MoU for the import of 100MW of electricity.

The feasibility study was conducted jointly by Moshanir (Iran) and Nespak (Pakistan) for import of 1000MW and its report was submitted on April 26, 2010. Both the parties agreed to construct HVDC interconnection on 500 kV level with converter and switching stations at Zahedan and Quetta.

Total length of the transmission line will be around 678 km out of which, 93 kms will be constructed in Iran and 585 kms in Pakistan. Iran will construct dedicated 1,300MW power plant at Zahedan for supply of 1,000MW to Pakistan.

The total estimated cost of transmission line project will be $700 million. According to NTDC, Iran has agreed to finance 70% of the cost of transmission line to be constructed in Pakistan side whereas 30% will be met through NTDC’ own sources.