India is expected to sign an initial deal to export around 500 mega watts (MW) per day of power to Pakistan this month when the trade ministers of the two south Asian neighbours meet.
Sources said the initial wheeling of power would be around 500MW but could be increased.
There are indications that Pakistan will increase the import to 2,000-2,500MW to meet the power shortage impacting its economy.
The wheeling of power between the two nations is expected to energise trade ties, resulting in Islamabad lowering the number of items on the negative list — a step towards granting most favoured nation status (MFN) to India.
The grant of MFN status means the two countries can trade on equal terms, giving each other low tariffs and high import quotas. India granted Pakistan the MFN status in 1996.
India’s Central Electricity Authority and Power Grid Corporation of India will be the nodal technical agencies. Pakistan will have the National Transmission and Despatch Company and Chief Engineering Advisor as its nodal agencies.
Officials said there was a broad agreement that cross border trading would be done through HVDC (high voltage direct current) coupling, as is being done with Bangladesh, ensuring that both the grids operate independently.
As Lahore is near Punjab, it will be economical to transfer power through Amritsar, officials said.
The project will require 45 kilometres of 220 kV transmission lines on both sides of the border — 25 kilometres in India and 20 kilometres in the neighbouring country.
The tariff is likely to be around Rs 8 per unit, which is almost similar to the rates in Pakistan, sources said.
Pakistan faces a 37 per cent, or 5,000MW, energy shortage and is desperately looking for ways to bridge the huge shortfall. Power shortages, along with endemic violence, have resulted in its textile mills moving to Bangladesh.
At present, Islamabad imports 35MW from Iran, which it plans to increase to 100MW. It is also considering importing another 1,000MW from Tajikistan.
Power production in Pakistan is only about 10,000-16,000MW against an installed capacity of 20,800MW. The sector is plagued by old plants, poor maintenance and high debt.
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