Electricity Supply Deal Signed between Central, South Asia

22 November 2007: Islamabad
An agreement was signed in Kabul to implement a $500 million electricity connection between Central and South Asia. In its first stage, the project would transfer around 1,300 megawatts of electricity from Tajikistan and the Kyrgyz Republic to Pakistan and Afghanistan.

Central Asia has abundant hydropower resources and seasonal energy surpluses by which power can be provided to Pakistan and Afghanistan at a lower cost.
A World Bank statement issued here stated that the third conference of the Central Asia South Asia Regional Electricity Market (CASAREM) took place in Kabul from November 14 to 16. This followed earlier conferences held in Dushanbe and Islamabad. Participants at the Kabul meeting reviewed reports on the technical and economic feasibility and institutional aspects of the project that had been prepared with support from the Asian Development Bank and the World Bank.

At the end of their three day meeting, CASAREM member countries – Kyrgyz Republic, Tajikistan, Pakistan and Afghanistan – made key decisions to move ahead with the project, which could ultimately trigger a much larger development of energy resources of Central Asia and expanded electricity trade with South Asia.

Mou signed: Through a memorandum of understanding signed at the end of conference, all four countries confirmed the feasibility and scope of the project which would comprise a 750 kilometre high voltage direct current (HVDC) transmission system between Tajikistan and Pakistan via Afghanistan; a DC-AC converter station in Kabul; and an AC transmission link between Kyrgyz Republic and Tajikistan to supply Kyrgyz electricity to South Asia via Tajikistan; and the overall institutional framework for this electricity trade to take place. In this regard, the parties agreed to establish an Intergovernmental Council (IGC) that will provide the policy oversight, and a Secretariat under the IGC to develop the project further, and to establish the Secretariat in Kabul.

ADB, IDB, WB: International financial organisations such as the Asian Development Bank (ADB), Islamic Development Bank (IDB) and the World Bank (WB) have been approached by CASAREM member countries to consider financing the project. The World Bank views this as a step forward in deepening regional integration and cooperation in the interests of all the countries.

“The agreement of the four countries to implement this project is a major step towards connecting South Asia to the low cost, clean energy resources of Central Asia,” said Alastair J McKechnie, World Bank country director for Afghanistan. “We expect the project to generate revenues for the poorer Central Asian countries, reduce energy shortages by providing lower cost power to Afghanistan and Pakistan, and to generate significant economic gains for Afghanistan. The project demonstrates the mutual benefits that the countries can achieve by working together to further their economic interests.” staff report

Source: Daily Times