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                                        Volume. 11899

Iran cancels $900m loan to Pakistan for power project
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TEHRAN – Iran will not provide a previously agreed $900 million loan to Pakistan to jointly build a power plant to export 1,000 megawatts (MW) of electricity to Pakistan, the Mehr News Agency reported on Monday.
 
Hamid Chitchian said building the power plant is not on the ministry’s agenda. The Pakistani side has not been committed to some of its obligations, he added.
 
Earlier, the Iranian firm exporting electricity to Pakistan had threatened to cut supplies because of delay in settling the dues.
 
During the incumbency of former Iranian president Mahmoud Ahmadinejad, Iran had also expressed interest in setting up a 200MW power plant in Balochistan. Tehran was also keen on installing smaller plants of 25MW each on the ground as well as on barges to help Pakistan overcome the power crisis.
 
But all the plans stalled due to the sanctions imposed by the West. Iran had offered to export 1,000MW of electricity during the tenure of the previous government.
 
At present, Iran is exporting 74MW of electricity per day to the border areas of Balochistan as well as Gwadar, but Pakistan has not been able to carry out banking transactions with Tehran since June 2011 after the U.S. and European Union intensified sanctions.
 
Sources told The Express Tribune that Pakistan’s Ministry of Water and Power was calling for the vetting of a draft of memorandum of understanding (MOU) to be signed with Iran for electricity import.
 
“Pakistan will be paying 8-11 cents per unit of electricity under the formula agreed with Iran,” a source said.
 
Under the project, Iran will build a powerhouse in its Zahedan province bordering Pakistan to generate electricity for export. Iran has also expressed its willingness to provide a loan of $800-$900 million for the project.

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