ISLAMABAD: Pakistan and Iran are gearing up for negotiations to extend their electricity sale agreement, set to expire on December 31, 2024. Sources indicate that both sides aim to finalize the renewal to ensure continued power supply to Pakistan’s Balochistan province.
Pakistan currently imports 100 MW of electricity from Iran, primarily for bordering areas of Balochistan, with payments managed through informal channels or barter trade agreements. The annual import stands at approximately 18 million units, priced at over Rs. 27 per unit—significantly higher than electricity generated from imported coal or RLNG.
The Iranian Embassy recently forwarded a list of pending remittance and invoice items to the Central Power Purchasing Agency-Guaranteed (CPPA-G) for payment clearance. In a letter to CPPA-G CEO Rihan Akhtar, Tavanir’s Chairman, Mostafa Rajabi Mashhadi, highlighted the urgency of renewing the bilateral agreement, originally signed in November 2002. Despite a virtual meeting between the parties, the tenth amendment to the contract remains unresolved.
To expedite the process, CEO CPPA-G has invited an Iranian delegation to visit Pakistan from December 23-26, 2024, to finalize the renewal. Mashhadi stressed the need for additional joint meetings to ensure the timely extension of the agreement.
The payment mechanism remains a contentious issue. Pakistan has committed to expediting payments for Iranian electricity and establishing a monthly payment system. However, delays have repeatedly strained relations between Tavanir and CPPA-G.
In 2022, Iran proposed a Memorandum of Understanding (MoU) to supply 5,000 MW of electricity to Pakistan, but the proposal has yet to materialize into a formal agreement.
The upcoming talks underscore the importance of cross-border energy collaboration as Pakistan seeks to secure reliable electricity supplies for its underserved regions.
Story by Mushtaq Ghumman
