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ISLAMABAD: Iranian government has shared draft of Memorandum of Understanding (MoU) for export of 5000MW electricity to Pakistan, official sources told Business Recorder.

The MoU is in continuation of the understanding reached during the visit of Minister for Power, Khurram Dastgir Khan to Tehran regarding export of electricity.

According to the MoU, to develop the existing brotherly and friendly relations between Iran and Pakistan and as well as to expand more than ever bilateral cooperation in the field of energy and electricity and as the result of the official visit by Khurram Dastgir Khan, Minister for Energy to Tehran during third week of June 2022 for a meeting with Ali Akbar Mehrabian both sides have reached to the following understanding: (i) Pakistan voiced its readiness to ink a long-term contract of power purchase with the capacity of 5000MW for five to 20 years period and Iran welcomed it; (ii) Iran “voiced its readiness to construct the relevant facilities including power plant, transmission lines, and the substations in its territory; (iii) Pakistan voiced its readiness to construct the relevant facilities including power plant, transmission lines and the substations in its territory; (iv) the finance for the construction of power plant in Iran’s territory near Pakistan’s border area can be either carried out by Iran or bilaterally or with both sides presence with the participation of a third party; (v) Iran voiced its readiness to supply gas for the so called power plant; (vi) both sides accepted that the construction of the power plant, transmission, lines and the substations be implemented by Iranian companies; (vii) for the aim of following and realizing the agreement as well as drafting the financial, technical and legal documents and the related contracts as well as the executional road map, both sides approved to form a Working Group in one month from now. Hence Arash Kordi, CEO of TAVANIR Company will head Iran’s side of the WG and the name yet to be finalized who will represent Pakistan in the WG. The other members of the Working Group will be communicated soon;

(viii) Pakistan committed to expedite the payment of the outstanding receivables regarding Iran electricity export to Pakistan and set up a mechanism in which monthly payment of electricity purchase will be automatically rendered; (ix) Pakistan voiced its readiness to support Iranian capable companies in the country tenders and the implementation of civil projects in Pakistan particularly those companies awarded the tenders; (x) any divergence arising from or relating to interpretation or implementation of this MoU will be settled amicably by mutual negotiation or consultation between the competent authority of the parties through diplomatic channels, without reference to any third party; (xi) this MoU will come into effect of its signature for a period of five years and will be automatically extended for further five years by mutual decision of the parties, unless either of the parties informs the other party in writing of its intention to terminate it, at least three months prior to the date of expiration;

(xii) the termination of MoU will not effect any arrangements, ongoing projects or programs arising out of the execution of MoU prior to such termination, unless both parties decide otherwise in writing; and (xiii) the MoU may be amended and supplemented at any time by mutual decision of the parties in writing. Any amendment or supplement will be regarded as the integral part of the MoU and will come into effect as of its signature. The MoU comprising an introduction and 13 paragraphs was signed in duplicate in Persian and English languages. In case of any divergence in interpretation or implementation, the English text will prevail.

Copyright Business Recorder, 2022

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Zygum Aug 19, 2022 11:59am
Very good decision by Pakistan to import 5000MW Electricity from Iran, Government import Crude oil and Gas also from Iran. We have already Rail Link and Road Link with Iran, so very less transportation cost and products are cheaper as compared with Arab countries
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Zygum Aug 19, 2022 12:01pm
Good decision
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Haider Aug 19, 2022 02:54pm
First time Pakistan go for positive action and also confirm that these payments should be in local currency and Pakistan can paid via our Agri related products to Iran and this local currency based agreement will be long time productive for both nations internal Business and Economy as well as Industries of both side.
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Mobeen Aug 19, 2022 06:42pm
Pakistan should establish the Gas fired power plants in Baluchistan along the gas pipeline route from Iran. There is no need to import the electricity except for the bordering region.
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Syed M Hussain Gardezi Aug 20, 2022 05:36am
Good news but sadly the same Ministry is being refused to implement Hydro power projects Funded by private sector in AJK ..
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Tanveer Aug 20, 2022 09:11am
@Zygum , I second this suggestion and it is very much need of present situation. Pakistan government should give priority to Pakistan interests.
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Syed Hasan Aug 20, 2022 01:45pm
It's a good move, however it would be interesting to see it is at a competitive rate or expensive one to make money. What is norm of PMLN government.
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Hamza Aug 20, 2022 03:22pm
Instead of importing electricity, government should implement large scale solar hydro and wind generated electricity so country can curb back on import of expensive fuels for conventional power plants. Government should make Pakistan self sufficient in electricity generation. Instead PMLN government is taking shortcuts as usual and indebting our country even more.
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Rizwan Aug 20, 2022 10:04pm
Not a wise move. Instead of buying electric power. We should proceed with the gas purchase Agreement signed several years back. Iran has already completed the pipeline upto Pakistani border. The gas could be used to run the existing RLNG PPs which are nearly 5000 MW and are often shutdown due to either high price of RLNG or non availability. Moreover the gas supply could also boost Industrial output.
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Hassan Gardezi Aug 20, 2022 10:44pm
In Pakistan terms, it's import of electricity. Kindly change the headline. It's Pakistani newspage
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Cool Aug 21, 2022 12:24pm
@Hamza, solar does not work at night. wind power can't be produced without wind. dams don't produce electricity when there is no water.
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Ahmad Aug 25, 2022 02:34pm
Pakistan has sufficient capacity to meet the nations demand. The problem is with supply of fuel. So why not just buy the fuel from Iran? Less power losses this way and cheaper electricity.
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