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Why Pakistan’s New Energy Proposal Is A Double-Edged Sword

Pakistan New Energy

A new proposal by Pakistani officials could bring much-needed energy to people in Kyrgyzstan and Tajikistan during the frigid winters in a long-planned project that will also see Central Asian energy go to Afghanistan and Pakistan.

A chain of hydropower plants strung across Tajikistan and Kyrgyzstan are a key part of the Central Asia-South Asia 1000 (CASA-1000) energy project that aims to bring some 300 megawatts (MW) of electricity to Afghanistan and 1,000 MW to Pakistan annually.

Kyrgyz President Sooronbai Jeenbekov said on a visit to the 1,200 MW Toktogul hydropower plant (HPP) on October 18 that "the effective implementation of the CASA-1000 project will greatly increase the export potential of the country to states in South Asia."

Toktogul has been the key domestic source of power for Kyrgyzstan for more than 40 years and, according to Jeenbekov, after its current modernization the HPP will continue to operate for at least another 40 years.

Pakistan Hydroelectric

(Click to enlarge)

The Toktogul hydroelectric power station in Kyrgyzstan. (file photo)

That is not only important for Kyrgyzstan but for the entire CASA-1000 project.

As the governments in Bishkek and Dushanbe have anxiously watched the project develop, they have been looking forward to reaping new revenues from the sale of power to Pakistan and Afghanistan.

But Pakistan has just asked for a change to that equation that would benefit the Tajik and Kyrgyz people during cold months but make CASA-1000 a bit less profitable for the state coffers of their countries.

Fantastic News?

Waseem Mukhtar, Pakistan's power division additional secretary, said in September that Islamabad wants CASA-1000 to be an "open access" power line, meaning that Pakistan could export its electricity as well as receive it from Kyrgyzstan and Tajikistan.

In comments published by Pakistan's The News on September 22, Mukhtar claimed Pakistan now has a surplus of electricity during some months and could supply Kyrgyzstan and Tajikistan with electricity during the winter when those two countries need it most. Related: Trump Surrenders 2.5 Billion Barrels Of Oil

At the same time, Islamabad would import the 1,000 MW annually that it agreed to take during the summer when its needs are greatest.

Looking at CASA-1000 as a regional power project, this announcement appears to be fantastic news.

Kyrgyzstan and Tajikistan have done a lot in the last decade to improve their ability to generate and distribute power across their countries in the winter.

But power outages and rationing continue -- and a new source of power brought via a transmission line that should soon exist would benefit many people in the two Central Asian countries.

Outside Help

With a great deal of outside help, Kyrgyzstan and Tajikistan have been busy preparing their HPPs and building new power transmission lines in expectation of exporting electricity and earning extra revenue.

Pakistan's proposal suggests there would simply be an exchange during certain months -- take some energy now and give some later.

This would significantly diminish the profits going to Bishkek and Dushanbe

Jeenbekov spoke at Toktogul not only to remind people of the reservoir's importance but also to announce that the HPP's modernization -- due to be finished in 2023 -- is currently ahead of schedule.

The modernization was necessitated by the fact that three of the four turbines at Toktogul went out of operation at the end of 2015.

The Asian Development Bank and the Eurasian Development Bank are financing the replacement of all four turbines, to be carried out by French and Swiss companies.

Central Asia

(Click to enlarge)

As part of the CASA-1000 project, a 500-kilovolt power transmission line still needs to be built from the Datka power substation in Kyrgyzstan to the Khujand substation in Tajikistan.

There are also huge costs for construction and upgrades in Tajikistan, Afghanistan, and Pakistan. Related: Is Eating Meat Worse Than Burning Oil?

International financial organizations are covering some of the costs, but the individual governments will have to pay for much of the HPP and substation upgrades as well as power transmission lines.

Tajikistan's Sangtuda-1 HPP, built with Russian help, and Sangtuda-2 HPP, built with Iranian aid, are both part of the CASA-1000 project and both HPPs have consistently been in the red since they were launched, in 2009 and 2011, respectively.


Security Concerns

Pakistan's Mukhtar also mentioned another change Islamabad wants to make to CASA-1000.

Security in Afghanistan has always been a concern and Mukhtar said if there was a disruption in the supply of electricity from Central Asia to South Asia "during the period from May to October then Pakistan will penalize the electricity supplier countries."

This is crucial because power lines from Tajikistan and Uzbekistan to Afghanistan have been cut temporarily several times in recent years.

That last demand appears to be a new requirement from Pakistan on multinational energy projects that transit Afghanistan. The News reported in July that Islamabad had conveyed a similar demand for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project.

"In case of a halt of gas provision to Pakistan because of any subversive activity in Afghanistan, Pakistan will never take the risk at any cost, rather Turkmenistan will have to bear the risk," the report said.

In the case of CASA-1000, it is worth mentioning that fighting in Afghanistan increases during the spring and summer, the months when Kyrgyzstan and Tajikistan would be exporting their electricity south.

The potential of CASA-1000 would be augmented by Pakistan's reverse flow of electricity, though it remains unclear how much electricity Pakistan could provide or why it now says it has a surplus of energy in the winter.

But the new option does require a new explanation of the importance of the project for people in Kyrgyzstan and Tajikistan.

Profit from the project would be in increased production capacity at factories and plants, as well as healthier populations sitting in well-heated, well-lit homes -- not entirely in export revenues from the sale of electricity.


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