ISLAMABAD: Pakistan and Iran have reached an agreement to extend their electricity sale contract, setting the price range between 7.7 and 11.45 US cents per kilowatt-hour (kWh) after successful negotiations, sources said. The revised agreement is expected to be presented to the Economic Coordination Committee (ECC) of the Cabinet for approval on Tuesday.
The previous contract between Pakistan’s Central Power Purchasing Agency–Guaranteed (CPPA-G)/NTDC and Iran’s Tavanir expired on December 31, 2024. Pakistan currently imports 100 MW of electricity from Iran, primarily supplying the bordering districts of Balochistan, amounting to roughly 18 million units annually. Payments have historically been made through informal arrangements or barter trade, with the current cost exceeding Rs27 per unit — higher than imported coal and RLNG power.
Negotiations were held in late December 2024, culminating in Amendment No. 10 of the agreement. Under the new pricing formula, R = 3.2 + 0.075 × P, R represents the electricity price in US cents per kWh, 3.2 is the fixed cost, and P is the monthly average OPEC crude oil price, ranging from USD 60–110. Despite the formula, the final price will remain within the agreed band of 7.7–11.45 cents/kWh.
Minimum take-or-pay obligations were also agreed, with Pakistan committing Rs30 million on all interconnection lines. Previously agreed line-loss sharing arrangements for the Polan–Jiwani and Pishin–Mand interconnection lines have been incorporated into the revised contract.
Both sides plan to brief their respective authorities before formally signing Amendment No. 10, ensuring the continuation of electricity supplies to Balochistan under updated terms.
Story by Mushtaq Ghumman
