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CASA-1000: NTDC seeks $35m financing

  • Original cost of project was $185 million, of which $92.66 million has already been disbursed
Published August 12, 2022
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ISLAMABAD: The National Transmission and Despatch Company (NTDC) has sought additional financing of $35 million for additional activities of the “challenging” Central Asia-South Asian Electricity Transmission and Trade Project (CASA-1000), well informed sources told Business Recorder.

According to the Aide Memoire, original cost of the project was $185 million, of which $92.66 million has already been disbursed whereas $46.74 million is to be released during current financial year. The closing date of project will be extended by about three years from March 31, 2023 to December 31, 2025.

A World Bank team led by Anthony Granville carried out the implementation mission from June 27 to July 7, 2022 to review the implementation of the project. The main objectives of the mission were to: (i) discuss the implementation of the CASA-1000 Project; (ii) review project status, including procurement, contact management, financial management, disbursement, and reporting under the Projects; (iii) review the implementation status of the Converter Station and Electrode Station and line; (iv) get an update on the implementation of the Resettlement Action Plan (RAP); (v) Account bank procurement; (vi) Technical code; and (vii) the project restructuring process required from Pakistan.

The World Bank team met with the team leaders of the CASA-1000 project of NTDC. The mission also met with representatives from the Ministry of Energy (Power Division) and the Ministry of Economic Affairs (MoEA). The Aide Memoire summarises the implementation progress, key issues discussed, and agreements reached with NTDC.

The bank in its Aide Memoire said that since all contracts have been awarded and are under implementation, the rating of the progress towards achievement of the objective of the project, which is to create the conditions for sustainable electricity trade between the Central Asian countries of Tajikistan and Kyrgyz Republic and the South Asian countries of Afghanistan and Pakistan is moderately satisfactory, while the overall implementation progress rating is also moderately satisfactory.

Four $2.3bn power projects declared ‘problematic’

The bank says contract of package TWO1- is the design, engineering and construction of 1,100 mega watt (MW) High Voltage Direct Current (HVDC) converter station and electrode station at Nowshera, Pakistan - signed on September 21, 2018. Currently, the engineering and procurement works are progressing as planned with civil works completed at about 54%, while the installation is at 5% with overall construction progress at about 29%.

NTDC reported to the Mission that there was an incident on two towers on the CASA-1000 500kV HVDC Transmission Line, which is under construction and financed by Islamic Development Bank (ISDB). The contractor of the line had informed NTDC through a letter of June 27, 2022 which was forwarded to the Bank on June 29, 2022 that on June 24, 2022, Towers # 184 and 185 of the 500kV HVDC Transmission Line were targeted by planting explosive material on both towers. Tower #184 sustained severe destruction, while the base of Tower #185 was partially damaged. NTDC security department along with Frontier Corps (FC) are currently investigating the incident and an updated report along with a remedial measure to avoid such incidents in the future would be forwarded to the Bank.

The mission was informed by NTDC of the need for additional funds to complete the CASA-1000 project in Pakistan. This additional fund requirement is largely borne out of the need to meet extra payment for additional activities to make CASA- 1000 operational such as, studies and implementation of reverse power flow from Pakistan to Central Asia and others. The expected amount of the additional financing shall be $ 35 million. NTDC will send a request letter for additional financing through its parent Ministry and the Ministry of Economic Affairs to the Bank for consideration.

It was agreed during the Mission that the current project closing date of March 2023 is no longer feasible, given several delays that the project has experienced. It was agreed that the project closing date should be extended to December 31, 2025, to allow the Afghanistan project to catch up and completed. NTDC will formally send a request letter for the project closing date extension to December 31, 2025 for the Bank’s consideration.

Pakistan is a recipient of a $600,000 grant for CASA-1000 project. NTDC had sought approval from the Bank to utilize this grant for a number of capacity building activities and the deployment of video conference facilities at several locations. The approval for several trainings at Lahore University of Management Sciences (LUMS) had been granted by the Bank but the Mission agreed that the remaining funds in the grant shall be concentrated on capacity building for NTDC staff who will manage the IMC facility. It was agreed that the specialized training shall target 36 NTDC staff that provides maintenance to the HVDC equipment. Also, because interaction with Tajikistan and the Kyrgyz Republic, where Russian is the official language, the learning of the Russian language shall be captured and included in the local training for CASA-1000 PIU team and other NTDC staff.

The Mission was informed that the Government of Pakistan had received the request from CASA member countries to have an Inter-Governmental Committee (IGC) meeting. However, this idea has since been dropped.

The Mission was informed that all civil works at the site would be completed by December 2022. All equipment at the warehouse in Karachi was to be brought to Nowshera and therefore, it was agreed that there will no more extension of the warehouse leasing in Karachi. The Mission observed and emphasized that the equipment at the site should be properly and carefully stored to protect from flooding.

The Mission was informed that the Government of Pakistan is still in the process of providing a reviewed version of the Account Bank Agreement. It is expected that before the end of August 2022, the revised version of the account Bank Agreement should be ready.

The Bank’s Aide Memoire further states NTDC team has finalized the land acquisition process for the covered area of (500x500m2) at Charsadda (Awan-Abad). The funds have been transferred to the district administration account in Charsadda, for early payment to the legal owners. The costs assessment of crops, trees and irrigation pumps have been evaluated and funds have been arranged by NTDC for the compensation to owners. The RAP for the electrode line has also been approved. NTDC will complete compensation payments of land acquisition and other entitlements per RAP before handing over the site to the contractor.

Copyright Business Recorder, 2022

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