Energy Trading Drives Landmark Cooperation in Central and South Asia
Tetra Tech is helping the U.S. Agency for International Development (USAID) add much-needed electricity transmission capacity by connecting Central and South Asia. Through the USAID-funded Regional Energy Security, Efficiency, and Trade (RESET) program, Tetra Tech provided technical assistance to the CASA-1000 Inter-Governmental Council (IGC) Secretariat. CASA-1000 is the first project under the Central Asia–South Asia Regional Electricity Market effort, a concept being pursued by the Kyrgyz Republic (Kyrgyzstan), Tajikistan, Afghanistan, and Pakistan to enable an electricity trade between Central and South Asia. The IGC was created to foster cooperation on the project, and its secretariat is overseeing construction and commissioning of a high-voltage transmission line from Kyrgyzstan to Tajikistan in Central Asia and from Tajikistan to Afghanistan and Pakistan in South Asia.
Pakistan and Afghanistan both experience perennial electricity shortages. Pakistan’s shortages are most severe during summer months, while Afghanistan’s shortages occur in summer and winter. Both countries face constraints on their ability to meet growing demand. The electric power systems of Tajikistan and Kyrgyzstan are designed to meet high winter demand. For much of the summer, hydropower capacity exceeds demand. In addition, only about 10 percent of the two countries’ 80,000 MW of hydropower capacity has been developed.
Completion of CASA-1000 will enable Tajikistan and Kyrgyzstan to transfer and sell their electricity surplus to Pakistan and Afghanistan. It will enable Pakistan to add 1,000 MW to its national grid and meet its peak demand as well as provide access to a reliable, clean, and less expensive energy supply. Afghanistan will benefit both as a consumer—receiving 300 MW—and as a transit country—generating revenue.
In support of the IGC Secretariat, Tetra Tech procured an executive director; prepared detailed plans for development of the transmission project; analyzed key issues; created timelines to reach financial closing; and facilitated legal and technical negotiations among the four member countries. Tetra Tech continued to provide legal support under the successor program, RESET (Energy-Links), and was instrumental in securing the signing of the master agreement and supporting financial documents in Istanbul in April 2015.
The agreement marks a ground-breaking level of cooperation and will enable the transfer of 1,300 MW of electricity between the two regions. The next steps for this landmark project will include final financing and construction.