Pakistan and Iran have agreed to extend their electricity sale agreement, setting the price between 7.7 to 11.45 cents per kWh, following successful negotiations according to sources.
The agreement, initially between Central Power Purchasing Agency Guaranteed (CPPA-G)/NTDC and Iran’s M/s Tavanir, expired on December 31, 2024. Iran’s embassy had requested clearance of pending dues for imported electricity, prompting renewed discussions. Currently, Pakistan imports 100 MW of electricity from Iran to supply border areas in Balochistan, amounting to approximately 18 million units annually. However, the cost exceeding Rs27 per unit is significantly higher than electricity from imported coal or RLNG.
A delegation from Tavanir visited Islamabad finalizing the terms of Amendment No. 10 during meetings held on December 26-27 at CPPA-G’s office. The agreed pricing mechanism ties electricity rates to crude oil prices, with the formula R = 3.2 + 0.075xP, where R is the price in US cents per kWh and P represents the monthly average price of OPEC crude oil, ranging between $60 and $110 per barrel.
The line loss-sharing mechanisms for Polan-Jiwani and Pishin-Mand interconnection lines, previously agreed in 2023 and 2024, were also incorporated into the amended contract. Both parties committed to informing relevant authorities before executing the agreement.
This extension highlights Pakistan’s reliance on Iranian electricity for remote areas, despite its relatively high cost, as both countries strengthen energy cooperation.
