CASA-1000: Pakistan, Afghanistan agree electricity transit fee

The new negotiated transit fee is 1.25 cents per kilo watt, down from the initial asking price of 2.5 cents

WASHINGTON: Pakistan and Afghanistan on Saturday agreed on electricity transit fees if 1.25 cents per kilo watt (KW) as part of the Central Asia-South Asia (CASA-1000) power project.

The agreement was signed by Finance Minister Ishaq Dar from Pakistan and Minister of Finance and National Economic Adviser Omar Zakhilwal from Afghanistan during the annual meetings of the World Bank and IMF in Washington, DC.

The agreement was signed after the price was negotiated down from the initial asking price of 2.5 cents to 1.25 cents per KW. The agreement would help establish commercial arrangements for 1,300 megawatts (MW) of sustainable regional electricity trade between Kyrgyz Republic, Tajikistan, Afghanistan and Pakistan as part of the CASA-1000 electricity transmission and trade project.

“Now that we have agreed on a transit fee for the electricity, I hope we can move forward quickly on this transformational project,” said Dar after the signing ceremony.

“We are ready to realise the CASA–1000 vision and improve energy security and trade for our countries and region,” said Zakhilwal.

CASA-1000 will involve construction of over 1,200 kilometers of electricity transmission lines and associated substations to transmit excess summer hydropower energy from existing power generation stations in Tajikistan and the Krgyz Republic to Pakistan and Afghanistan. To oversee the complex, four-country process, and inter-Governmental Council has been established to supervise the design and implementation of the project.

In March 2014 for the World Bank Group approved financing for the engineering design, construction and commissioning of transmission lines and three new converter stations. The project would build upon existing power generation stations that will provide the energy to be traded over CASA-1000.

Commercial and operating framework for CASA-1000 is specifically based on “open access” principles that will allow additional energy supplying countries to connect with wider regional transmission networks. CASA-1000 will enable the development of the Central Asia South Asia regional electricity market, (CASAREM) – a long-term plan for regional energy trade.

U.S. welcomes CASA-1000 transit pricing agreement announced today between Afghanistan and Pakistan. http://t.co/XtUkvl0uD6

— Department of State (@StateDept) October 11, 2014