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Tajik power project: Pakistan refuses to extend $500 million credit
 admin May 3, 2010, 07:39:39 AM 

ISLAMABAD (July 24 2009): Pakistan has refused to extend $500 million credit to Tajikistan for construction of Rogun Hydro Power Station reason being Tajikistan\'s poor repayment record and Pakistan\'s inability to pay the credit amount during current energy crisis. Sources told Business Recorder that Pakistani authorities during the Joint Economic Commission (JEC) meeting held on July 20-21 in Islamabad had told Tajikistan that Pakistan was not in a position to extend credit. In 1992, Pakistan entered an agreement with Tajikistan for disbursement of $500 million credit for construction of Rogun Hydro Power Station, which due to its time limit has now lapsed. Tajikistan has been trying to secure Pak investment in hydropower projects that are vital for electricity export, for which Rogun project had been in the limelight for quite sometime. Tajikistan is trying hard to form an international consortium to complete unfinished work on the project that has been stalled primarily because of civil war in Tajikistan. Sources said Tajikistan\'s poor repayment history has been a major hurdle in attracting foreign investors. Tajikistan\'s bid to invite Pakistan to join the inter-governmental consortium on Rogun station was examined by the Ministry of Water and Power. Sources noted that the Ministry of Water and Power are of the view that Pakistan is facing acute power shortages and working on war-footings to set up power generation projects including big power houses such as Basha Dam and is actively engaged in arranging finance for mega hydropower projects through international donor agencies. It may therefore, be difficult to extend the required credit for Rogun project, however, Pakistan may show willingness to offer full technical co-operation for the project, sources said, adding that Tajikistan has been informed in this regard. Sources said that the feasibility study of CASA 1000 MW project has been completed and provided to all the four governments for comments. The drafts of the term sheets for various agreements - concession agreement, power purchase agreement, transmission service agreement, etc, have been prepared to negotiate between the countries. Presently, the countries are reviewing these drafts. Following their own reviews, the countries need to negotiate these documents among themselves. Once this process is completed, the IFIs can be approached to finance the share/components of the project in various countries. Currently, an assessment of the electricity available (for export) in the Kyrgyz Republic is also under way. Once the issue of surplus electricity in Kyrgyz Republic is resolved and the overall surplus electricity in the Central Asian countries is determined, negotiations among/between countries can start. Afghanistan has recently completed a transmission link with Uzbekistan energised in April. Since some additional electricity is now available to Afghanistan, they may spare some electricity for Pakistan. During 3rd Regional Economic Co-operation Conference on Afghanistan (Recca) held in Islamabad on May 13-14, 2009, participants agreed on the need to expedite establishment of trans-Afghan energy corridors. They took note of progress on the Central Asia - South Asia Regional Electricity Market initiative. Representatives of the parties participating in the CASA 1000 MW project examined the current framework for transferring excess summer electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan. The four governments and representatives of the World Bank and Islamic Development Bank reiterated their support for CASA 1000 MW. Recca participants support the project.

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