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Pakistan in $51 million debt to Iran for electricity import

Iran Materials 29 March 2013 15:57
Due to imports of electricity from Iran, Pakistan is in debt to the Islamic Republic for $51 million, PakObserver reported.
Pakistan in $51 million debt to Iran for electricity import

Due to imports of electricity from Iran, Pakistan is in debt to the Islamic Republic for $51 million, PakObserver reported.

In the wake of US sanctions and its allied countries of EU, Japan and Canada, Iran has not be able to get the $ 51 million from Pakistan for the electricity it is exporting to some areas of Balochistan.

Now it has been decided that Pakistan would provide the wheat and rice instead of cash and Tehran has agreed to it.

Iran had earlier threatened Pakistan to cut electricity supply, if dues amounting $ 51 million are not paid.

"This warning had landed the energy deficit country into more trouble as the switching off by Iran would have multiplied the power outages duration in Balochistan," reveals the official document available with The News.

Iranian energy company-TAVANIR in its communication to Foreign Office of Pakistan had told in plain words that it is going to cut the electricity supply of 74 MW by August, if its dues are not be paid.

Iran is exporting the electricity through 132 kv transmission line from Jakigur to Mand. In 2006, Pakistan imported 39 MW and then 36 MW more added from Iranian side.

Pakistan is currently importing electricity of 74 MW from Iran for bordering areas of Balochistan and since Islamabad did not pay for the electricity being imported since June 2011 up till now. Iranian electricity is currently being imported at the rate of 8-9 cents per unit.

This senior official on the condition of anonymity told that the government of Pakistan is willing to pay $ 51 million, but in the wake of US and EU economic sanctions, it is difficult to go for any banking transaction for Iran.

Meanwhile, the NTDC had placed the request with Iran not to cut the electricity supply hoping the issue will be resolved and the Iran will be compensated.

After exhausting all the options, both the countries have decided on barter trade under which Pakistan would continue to provide wheat and rice instead of the cash in dollar to Iran because of the US sanctions.

It is pertinent to mention that Pakistan has already inked a deal with Iran for importing 1000 MW at 10 cents per unit. "The tariff will be revised after every three years after the commissioning of the project."

The project to import 1000 MW electricity will be materialized in the four years' time.

Under the proposed project, he said, Iran would build a power house specifically for Pakistan in Zahidan and a 700 kilometer transmission line will be laid down from Pak-Iran border to Quetta for importing the electricity that will be injected in the national grid.

To a question, the official said that the nature of transmission line will be of 500 kv-DC (Direct Current).

When asked as to who will fund the project of transmission line from border to Quetta, the official said Iran has shown its willingness to provide $800-900 million for the project and we are in process to examine the offer.

It is pertinent to mention that Iran has already come up with offer to export electricity in the rage of 5000-6000 MW during the last visit of Pakistan's delegation headed by Federal Minister for Petroleum and Natural Resources where in it discussed the Iran-Pakistan gas pipeline.

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