Sources informed Business Recorder that Pakistan and Iran are preparing to negotiate an extension of their electricity sale agreement, which is set to expire on December 31, 2024. Currently, Pakistan imports 100 MW of electricity from Iran to supply its border areas in Balochistan, with payments being processed through informal channels or barter agreements. This amounts to approximately 18 million units annually.
The current price of Iranian electricity in Balochistan exceeds Rs 27 per unit, significantly higher than the cost of electricity generated from imported coal and RLNG.
The Iranian embassy has recently sent a list of remittance and invoice items to the Central Power Purchasing Agency-Guaranteed (CPPA-G) to clear pending dues related to the imported electricity. As per the embassy, the contract between Iran’s Power Generation Transmission and Distribution Management Company (Tavanir) and CPPA-G is nearing its expiration. Tavanir has requested an urgent joint meeting to discuss the contract’s extension.
Pl, watch the video and subscribe to the YouTube channel of republicpolicy.com
The Ministry of Foreign Affairs has forwarded the Iranian embassy’s communication to CPPA-G and the National Transmission and Dispatch Company (NTDC). Tavanir’s Chairman, Mostafa Rajabi Mashhadi, highlighted the necessity of holding additional meetings to finalize a new amendment for the extension, referencing prior correspondences that included a readiness to finalize amendment number 10 to renew the 2002 contract.
On December 13, 2024, CEO of CPPA-G, Rihan Akhtar, proposed a visit from the Iranian delegation between December 23-26, 2024, to finalize the contract renewal. Pakistan has committed to accelerating payments for outstanding receivables concerning electricity imports from Iran and establishing a monthly payment mechanism. However, payment issues have historically created friction between Tavanir and CPPA-G.
In 2022, Iran proposed a Memorandum of Understanding (MoU) for selling 5000 MW to Pakistan, but this has yet to materialize into a formal agreement.
