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ISLAMABAD: The World Bank is to extend additional financing for CASA-1000 to meet extra payment obligations for additional activities to make CASA-1000 operational, such as studies and implementation of reverse power flow from Pakistan to Central Asia and others.

World Bank’s Acting Country Director, Pakistan, Gailius J Draugelis, in a letter to Secretary EAD, Dr. Kazim Niaz appreciated the collaboration and courtesies afforded by all counterparts to the World Bank team during the implementation support mission for the Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000) between March 5 and March 17, 2023.

The World Bank team has appreciated the Ministry of Energy – Power Division (MOE-P) and National Transmission and Despatch Company (NTDC) for their continued support in moving this important project forward.

Closing dates of two CASA-1000 financial agreements extended

The closing date of the CASA-1000 project was extended from March 31, 2023, to December 31, 2025, via a letter on March 31, 2023. The mission found that work is proceeding as planned at the Nowshera convertor station site in Pakistan. The project still faces key challenges for which the Bank would appreciate support for their timely resolution.

The mission was informed by NTDC of the need for additional funds to complete the CASA-1000 project in Pakistan. This additional funding requirement is largely borne out of the need to cover the exchange rate loss between XDR and USS, which would also allow NTDC to meet extra payment obligations 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 amount of the additional financing should be estimated based on the expenditure plan to determine the timing of the need for the additional financing. Upon determination of amount and timing, and upon consultation with the Bank and Ministry of Economic Affairs, NTDC would send a request letter for the additional financing through the Power Division and the Ministry of Economic Affairs (MoEA) to the Bank for consideration.

The CASA-1000 Multi Donor Trust Fund grant for USS600,000 closes on December 31, 2024. Despite regular follow-up, these funds remain unutilized. The NTDC must start utilizing the grant for its intended purpose of capacity building and implementation support, as CASA-1000 approaches the commissioning phase.

Electrode Station: NTDC to complete the payment of allowances to those affected by the electrode station land acquisition and ensure the handover of the site to the contractor by July 1, 2023 as agreed.

The objective of the CASA-1000 project is to create the conditions for sustainable electricity trade between the Central Asian countries of Afghanistan and Pakistan.

The full contractual arrangements for the construction of infrastructure for the CASA-1000 project across the four countries are in place with the signing of the ten Engineering Procurement, and Construction(EPC) contracts for the project, that include the two EPCs in Pakistan, the High Voltage Direct Current (HVDC) converter station (TWO1) and the 500kV HVDC Transmission line contracts (TWO2).

The work is progressing well in all the countries and in all components, except stoppage of work in Afghanistan component of the project. The Afghanistan work is still on hold and the Bank team is working, under the guidance of management, to find a solution to restart the implementation work.

As the delay is likely to impact the overall project implementation progress, progress towards achievement of PDO and Overall Implementation Progress (IP) is rated Moderately Unsatisfactory and Moderately Satisfactory, respectively. The rating would be reviewed periodically Contract Package TWO1- Design, Engineering and construction of 500KV HVDC Converter Station at Nowshera, Pakistan: This covers the design, engineering and construction of a 1,300

MW HVDC converter station and electrode station at Nowshera, Pakistan. The contract was signed on the September 21, 2018.

Currently, the engineering and procurement work is progressing according to plan. As of now, the civil works are at about 93%, while installation stands at 29%resulting in an overall construction progress of about 60%. Contract Package TW02 is related to design, engineering and construction of 500 KV HVDC transmission line from Afghanistan/Pakistan border to the converter station in Pakistan.

The project is funded by Islamic Development Bank using World Bank’s safeguard protocols. Safeguard documents including ESIA and RAP are being implemented to manage environmental and social risks and impacts. It has been reported to the Bank by CASA PIU that the project is progressing well with 100% of Engineering and Design done, 100% of procurement also completed, 92% of foundation works have been done and 83% of erection completed. The overall construction of the project is about 68%.

The mission was informed by NTDC of the need for additional funding to complete the CASA-1000 project in Pakistan. This additional funding requirement is largely borne out of the need to cover the exchange rate loss between SDR and USD, which would also allow NTDC to meet extra payment obligations for additional activities to make CASA-1000operational, such as studies and implementation of reverse power flow from Pakistan to Central Asia and others.

The amount of the additional financing is expected to be currently about USD25 million, but the final amount will depend on the expenditure plan which would determine the amount and timing of the additional financing needed. Upon doing an assessment of the expenditure plan and consulting the Bank and Ministry of Economic Affairs, NTDC would send an additional financing request letter through its parent Ministry and the MoEA to the Bank for consideration.

NTDC through the MoEA sent a letter dated February 15, 2023requesting extension of the CASA-1000 project closing date until December 31, 2025. The Bank shared the notice of extension of the Closing Date to December 31, 2025, via letter dated March 31, 2023.

A grant agreement for USD100,000 was initially signed in September2017. USD500,000 were added in June 2020, bringing it to a total of USD600,000, and its extended closing date is December 31, 2024. However, despite regular follow-up, the grant remains totally unutilized.

The NTDC must start utilizing the grant for its intended purpose of capacity building and implementation support, as CASA-1000 approaches commissioning. Pakistan is a recipient of aUSD600,000 grant for CASA-1000 project from Multi Donor Trust Fund. NTDC had sought approval from the Bank to utilize this grant for capacity building activities and deployment of video facilities at several locations.

On December 15, 2022, USAID informed the Bank and the CASA countries of its decision to stop supporting the CASA Secretariat and allowed a transition period till the end of June 2023 for the countries to take over the functions of the CASA Secretariat.

Among other operational issues, the initial draft for operational readiness invoicing mechanism has been prepared by the CASA Secretariat Consultant but the current minimal support to the Secretariat is hampering development. The issue is expected to be discussed further in the next Joint Working Group (JWG) meeting with other countries and the CASA Secretariat.

Copyright Business Recorder, 2023

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Tulukan Mairandi Apr 28, 2023 12:28pm
Once again it will be pilfered
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