The Perspectives of the Central Asia, South Asia Regional Electricity Market
by the Minister of Foreign Affairs of Tajikistan Sirodjidin Aslov
The development of the Central Asia South Asia Regional Electricity Market (CASAREM) is envisaged as a phased development of institutional arrangements and infrastructure to link Central Asias power resources with South Asia’s energy shortages and growing energy demand. The improved electricity interconnections offer an opportunity to alleviate energy poverty and contribute to stability and growth in Afghanistan, and boost inter-dependent prosperity in all the countries involved. The proposed CASA-1000 project will facilitate the first electricity trade of 1,300 megawatts (MW) of existing summertime hydropower surplus from Kyrgyzstan and Tajikistan in Central Asia to Afghanistan and Pakistan in South Asia.
The CASA-1000 Project would comprise:
- around 750 km High Voltage Direct Current (DC) transmission system between Tajikistan and Pakistan via Afghanistan;
- a DC to Alternate Current (AC) converter station in Kabul to supply Kabul area;
- an AC transmission link between the Kyrgyz Republic and Tajikistan (477 km) to supply Kyrgyz electricity to South Asia via Tajikistan; and
- institutional and legal framework to enable such electricity trade.
It is expected that the project will deliver a number of economic, social and environmental
benefits to all participating countries. These benefits include, among others, energy poverty alleviation, improved trade, job creation and reduction of carbon dioxide (CO2) emissions due to supply of clean electricity.
The World Bank provides assistance to the involved countries in conducting technical, economic and environmental feasibility studies. A regional public consultation with all interested countries and stakeholders is maintained in a transparent manner.
An updated techno-economic feasibility study for CASA-1000 was prepared in February 2011. The
feasibility study confirms the soundness of the considerations that led to the CASAREM initiative of developing a regional market. Those are:
- Sufficient quantities of summer surplus electricity are available in the Central Asian countries (Kyrgyz Republic and Tajikistan) even without any new power generation;
- Significant demand for electricity exists in South Asia (largely in Pakistan); and
- Difference in the cost of electricity between the importing and exporting countries potentially provides a justifiable rationale to undertake investments in transmission networks in order to support electricity trade.
A regional environmental assessment published in November 2013 notes that the project will utilise only existing available power and does not involve the construction of any additional generation capacity. The CASA-1000 project does not envisage any modifications to the current operating regimes therefore will have no impact on water resources management or operational arrangements in the participating countries. All relevant studies on the project have been made publically available for all interested parties on the website of the World Bank.
To make this project a reality, the Kyrgyz Republic, Tajikistan, Pakistan, and Afghanistan have signed an Inter-Governmental Agreement and established an Inter-Governmental Council with a Secretariat based in Almaty, Kazakhstan.
With an estimated budget of around US$1 billion, the four countries have decided to implement CASA-1000 as a public sector project through their respective national transmission companies with support from International Finance Institutions (IFI) and other donors.
In December 2013, the Government of the United States announced commitment of US$15 million in financing towards the CASA-1000.
In addition to the commitment of these four countries, the CASA-1000 project is proposed to be financed by the World Bank Group, the Islamic Development Bank, and possibly by other donor agencies such as the United States Agency for International Development (USAID), the United Kingdom Department for International Development (DfID), the Australian Agency for International Development (AusAID).
It should be underlined that realisation of the CASA-1000 project would be extremely complicated without a common legal international framework. It is very fortunate that all Central Asian countries are all contracting parties to Energy Charter Treaty (ECT). The aim of the Treaty is to strengthen the rule of law on energy issues by creating a level playing field for energy exporting, importing and transit countries.
It is important to note that Afghanistan became the fifty-fourth member of (ECT) on 20 June 2013. In the context of ongoing expansion of the ECT geographical coverage, Pakistan is currently in the ratification process of the ECT. Implementation of large scale electricity interconnection projects like CASA-1000 is certainly facilitated through the Energy Charter which provides an international legal platform for long term energy cooperation among its constituency. As an active founding member of the Energy Charter Tajikistan strongly promotes expansion of the ECT to the countries in South Asia and other regions.
The implementation of the project and construction works is expected to start in the course of 2014. The Government of Tajikistan is open for cooperation and invites interested governments and companies in the Energy Charter constituency to participate in the CASA-1000 project and to facilitate expansion of electricity trade in the region of Central and South Asia.
CASA-1000 is a practical example of a project that supports regional economic connectivity and our New Silk Road vision.