October 11, 2014: Next Step in Energy Trade between Central and South Asia
Afghanistan, Pakistan agree on transit fees for electricity trade
Afghanistan and Pakistan signed an agreement on electricity transit fees between the two countries, taking an important step forward for energy trading between Central and South Asia.
The agreement was signed during the Annual Meetings of the World Bank and IMF in Washington DC by the Minister of Finance and National Economic Advisor for Afghanistan and the Minister of Finance for Pakistan. It helps to establish the commercial arrangements for 1,300 megawatts (MW) of sustainable, regional electricity trade between Kyrgyz Republic, Tajikistan, Afghanistan and Pakistan as part of the Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000).
"Now that we have agreed on a transit fee for the electricity, I hope we can move forward quickly on this transformational project," said Ishaq Dar, Minister of Finance for Pakistan.
"We are ready to realize the CASA-1000 vision and improve energy security and trade for our countries and region," said Omar Zakhilwal, Minister of Finance for Afghanistan and National Economic Advisor.
CASA-1000 will build more than 1,200 kilometers of electricity transmission lines and associated sub¬stations to transmit excess summer hydropower energy from existing power generation stations in Tajikistan and the Kyrgyz Republic to Pakistan and Afghanistan. To oversee the complex, four-country process, an Inter-Governmental Council has been established to supervise the design and implementation of the project.
In March 2014, 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.
The 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.