Pakistan is in the final stages of negotiating a deal to increase its electricity imports from Iran tenfold, a Pakistani government spokesman said Tuesday, part of a push to boost trade when sanctions relating to Iran's nuclear program are phased out.
Iran currently exports around 100 megawatts of electricity to the areas of Pakistan that border Iran. Pakistan is in the final stages of negotiating a deal that will increase that to 1,000 MW, said Zafar Yab Khan, the spokesman for Pakistan's ministry of water and power.
"It's likely to be finalised shortly," he was quoted by Reuters as saying. "The power purchase agreement would include a transmission line."
Pakistan's trade with Iran, worth $1.3 billion in the financial year 2008-9, plummeted to $217 million dollars in the 2013-4 financial year.
The drop came after the United States, European Union and UN imposed sanctions aimed at halting Iran's nuclear program.
A deal reached last month means the sanctions could soon be phased out.
Energy-starved Pakistan suffers about 12 hours of power cuts per day and is keen to import Iranian oil and gas, said Robina Athar, additional secretary in Pakistan's ministry of commerce.
"The biggest issue right now is the payment mechanism," said Athar. "Both central banks are in communication and hope to find a mechanism before sanctions are lifted."
She said Pakistan was upgrading its current border post with Iran and preparing to open a second one in anticipation of greater trade.
Iran was interested in Pakistani textiles, surgical goods, sports goods and agricultural products, she said. Pakistan wanted energy products, iron and steel.
