ISLAMABAD: Pakistan will buy more electricity from neighboring Iran, the country’s finance ministry said in a statement on Tuesday, less than a week after the two states signed a five-year trade deal with a target of $5 billion.
Pakistan and Iran share a 959-kilometer frontier that begins at the Koh-i-Malik Salih mountain and ends at Gwadar Bay in the Gulf of Oman. Trade volume between the two countries currently stands at approximately $2 billion, and Iran exports around 100 megawatts (MW) of electricity to the areas of Pakistan that border it.
In May this year, Pakistani Prime Minister Shehbaz Sharif and Iranian President Seyed Ebrahim Raisi jointly inaugurated the Polan-Gabd Electricity Transmission Line at a border crossing between the two states, aiming to bring an additional 100 megawatts (MW) of electricity from Iran to the South Asian country, especially to sustain China-backed development projects on Pakistan’s southwestern Gwadar port.
“The economic coordination committee (ECC) has considered a summary from the ministry of energy (power division) regarding a contract with Tanavir Iran for the purchase of 104 MW of electricity,” a statement from the finance ministry said, referring to Iran’s state-owned energy company.
The ECC approved the amendments in the contract with Tanavir related to the extension of the tariff for the existing supply of 104 MW from Iran’s Jakigur district to Pakistan’s Mand town which started in January 2022 and will continue until the end of December 2024.
The amended contract, the statement said, included the tariff agreed for an additional supply of 100 MW through the Polan-Gabd Transmission Line from March 16, 202, to December 31, 2024.
Last week, Iran’s foreign minister Dr. Hossain Amir Abdollahian signed a five-year trade agreement with his Pakistani counterpart Bilawal Bhutto Zardari to enhance exchanges in the energy sector between the two states.