CASA-1000 Suddenly Gets New Lease of Life

The CASA-1000 project, a transformative initiative aimed at bolstering regional energy cooperation and sustainability, has recently gained renewed momentum. This ambitious project, designed to transmit surplus hydroelectric power from Central Asia to South Asia, had been facing several challenges, but recent developments have breathed new life into its progress.

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Background: What is CASA-1000?

CASA-1000, which stands for Central Asia-South Asia Electricity Transmission and Trade Project, is a landmark initiative involving Kyrgyzstan, Tajikistan, Pakistan, and Afghanistan. The project aims to facilitate the transfer of 1,300 megawatts (MW) of surplus electricity from the hydroelectric power plants in Kyrgyzstan and Tajikistan to Pakistan and Afghanistan. This endeavor not only addresses the energy deficits in South Asia but also strengthens regional cooperation and economic integration.

CASA-1000 suddenly gets new lease of life?

ISLAMABAD: Pakistani authorities are optimistic about restarting the halted work on the CASA-1000 project’s transmission line in Afghanistan by July 2024, aiming for completion within three years. The World Bank is prepared to provide $300 million in funds, accessible independently of the Taliban-controlled Da Afghanistan Breshna Sherkat (DABS), sources informed Business Recorder.

The CASA-1000 project aims to transfer surplus hydropower from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan. The project’s groundbreaking occurred in May 2016 with the participation of leaders from the four countries involved.

Tips to Stay Cool on Pakistan's Longest Day:
Tips to Stay Cool on Pakistan's Longest Day:

According to sources, the work in Pakistan, Kyrgyzstan, and Tajikistan is nearing completion. The electricity supply to Pakistan is scheduled from May to September each year.

The transmission lines have bi-directional capability, allowing the system to be used for exporting electricity from Pakistan to Central Asian Republics (CARS) during the winter, subject to a commercial agreement. This project will enhance the renewable energy capacity in the generation mix and help lower the country’s overall energy costs.

Sources further stated that energy payments are based on units delivered, with tariffs covering both generation and transmission. The project comprises 10 contracts, including five with Indian companies, awarded through international competitive bidding. Payments are made directly by the funding agencies after verification by consultants and companies.

During a meeting held in Dubai on December 4-5, 2023, ministers from the three countries urged the World Bank to re-engage in Afghanistan to prevent the assets created in other countries from remaining unused.

International financial institutions involved in the project have continued their funding, and significant debt repayments have already been made. However, the project will not yield the expected benefits until power transmission is activated, which depends on the World Bank resuming activities and releasing funds for the Afghanistan portion of the work.

Sources revealed that during the Joint Working Group meeting held in Istanbul on March 7-8, 2024, the World Bank confirmed that its Executive Board had endorsed a new approach on February 15, 2024. Under this approach, $300 million in funds could be made available outside the control of the Taliban. Da Afghanistan Breshna Sherkat (DABS) has confirmed its endorsement of this condition.

Sources also mentioned that DABS is coordinating with contractors to provide a timeline for resuming and completing the work. DABS has issued Force Majeure withdrawal letters to its contractors and consultants, with the completion date to be proposed by contractors after assessing the situation.

The EPC contractors KPTL and KEC have indicated they will restart activities as soon as arrears payments and forward funding confirmation are agreed upon. Of the $50 million in outstanding arrears, $44 million has been paid to the contractors. Additionally, 100% of the necessary materials are already stored in Afghanistan and are in good condition.

Work in Afghanistan is expected to resume in July 2024, with the transmission line’s completion anticipated by 2026.

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