🔳 Despite strong public criticism and repeated assurances from the Federal Minister for Power, NEPRA approved the purchase of electricity from Iran on May 15, 2026. Under the Take or Pay clause, Pakistan will be required to pay for 15 million units every month, whether this electricity is actually used or not. This alone could create an additional financial burden of approximately Rs 500 million to Rs 550 million per month.
🔲 Public Investigative Series Episode 30
Topic: How Can Pakistan’s Electricity System Be Fixed?
Title: Iranian Electricity Part 2
🔺 When institutions avoid providing facts, reaching the truth becomes the responsibility of the people.
Written and researched by Syed Shayan
NEPRA’s approval on May 15, 2026 to import an additional 100 MW of electricity from Iran for Gwadar and Makran Division through the 132 kV Polan Gabd transmission line appears to be the continuation of an old and ongoing arrangement.
This transmission line runs from Polan in Iran to Gabd, a Pakistani border settlement, from where electricity is supplied to Makran, Gwadar and nearby areas.
The basis of this arrangement was laid during the PDM government. In March 2023, the then Minister for Energy, Khurram Dastgir, visited Iran and finalized the agreement.
On May 8, 2023, Prime Minister Shehbaz Sharif and Iranian President Ebrahim Raisi jointly inaugurated the Polan Gabd 220 kV electric transmission line at the Mand Pishin border. The stated purpose was to reduce the severe electricity shortage and prolonged load shedding in Balochistan, particularly in Gwadar and Makran Division.
The original idea of importing electricity from Iran emerged in 2002 during the government of General Pervez Musharraf. At that time, the federal cabinet approved the proposal, including the then Federal Minister for Water and Power, Aftab Ahmad Khan Sherpao, and WAPDA Chairman Lieutenant General retired Zulfiqar Ali Khan.
At the time, the arrangement was presented as an immediate response to the electricity crisis.
However, critics argue that the decision was made without serious consideration of local solar, wind and hydel resources. If Pakistan had developed solar and wind power projects in Gwadar and Makran instead of importing electricity from Iran, this region could have become energy self sufficient by now.
Gwadar could also have emerged as a major green energy hub, capable of supporting the electricity needs of other parts of the country.
Instead, Pakistan’s policy makers ignored local water, sunlight and wind, and pushed this region toward expensive imported electricity, dollar based payments and burdensome Take or Pay arrangements.
This reflects a style of governance in which major decisions are made behind closed doors, while the public continues to bear the consequences for decades.
It also recalls earlier examples of centralized decision making, such as the Indus Waters Treaty signed during the rule of General Ayub Khan without broad public consultation. After that treaty, Pakistan had to give up its rights over rivers such as Ravi, Sutlej and Beas.
The stated objective of importing an additional 100 MW of electricity from Iran was to support domestic consumers, local industry, agriculture, businesses and commercial activity linked with Gwadar Port.
Pakistan was already purchasing around 104 MW of electricity from Iran. After the new line became operational, total imports reached approximately 204 MW.
However, this arrangement raises several serious concerns. These include the Take or Pay clause, the dollar and oil indexed tariff, and the growing dependence of a strategic region like Gwadar on external electricity.
This concern becomes even more serious because the coastal belt of Makran and Gwadar is widely considered suitable for solar and wind energy, where local alternative energy projects could have been developed within a relatively short period.
Later, in September 2023, CPPA G approached NEPRA for approval of the tariff, extension of the agreement and Amendments 7, 8 and 9 related to electricity imported from Iran. However, final approval was granted only on May 15, 2026.
The main reason for this delay of almost three years was procedural violations by CPPA G itself.
NEPRA strongly criticized the company and stated that CPPA G had first implemented the agreement and sought approval later, even though prior approval was mandatory under the Electric Power Procurement Regulations 2022.
According to NEPRA, this was not an isolated incident but part of a repeated pattern adopted by CPPA G, the Central Power Purchasing Agency.
NEPRA also warned that similar violations in the future could lead to serious regulatory consequences.
A disturbing practice has developed in Pakistan’s power sector. Decisions are made first, agreements are implemented, financial burdens are placed on the public, and regulatory approval is sought later.
When questions are raised, political cover is somehow found. This is one reason why I have argued in earlier episodes for the restoration of a strong central institution like WAPDA, so that this fragmented power system can be placed under one accountable structure.
After NEPRA’s formal approval, the arrangement to import an additional 100 MW of electricity from Iran for Gwadar and Makran has received regulatory status. Total imports now stand at approximately 204 MW, while the tariff is around 12.40 cents per unit.
However, the Ministry of Energy and NEPRA must now explain the most concerning feature of this approval: the Take or Pay clause.
Under this clause, Pakistan must pay for at least 15 million kilowatt hours, or 15 million units, every month, whether this electricity is consumed or not.
At 12.40 cents per unit, this can create an energy cost burden of approximately Rs 500 million to Rs 520 million per month, and around Rs 6 billion to Rs 7 billion per year.
The second major concern is that this imported electricity is fully linked to the US dollar. If the rupee weakens further, or if international oil prices rise, the same electricity priced at 12.40 cents per unit will become even more expensive for Pakistan in the future.
This means that the energy security of Makran and Gwadar has been left dependent not only on another country, but also on exchange rate volatility and international market shocks.
Another important issue is that the price of this electricity is not linked only to the US dollar. It also includes an oil indexed formula. This means that if global oil prices rise, Iranian electricity can become even more expensive.
In other words, for a region where sunlight and wind are free and abundant, Pakistan is relying on imported electricity that remains exposed to both currency depreciation and global oil market shocks, instead of building local solar and wind infrastructure.
The question is simple. If NTDC, the National Transmission and Despatch Company, had been claiming for years that Makran and Gwadar had been connected to the national grid through the Basima Panjgur transmission line and other projects, why did the need to import expensive electricity from Iran on dollar linked and Take or Pay terms continue?
Interestingly, the same NTDC has now been divided into three separate companies.
One is the National Grid Company. The second is ISMO, the Independent System and Market Operator. The third is the Energy Infrastructure Development and Management Company.
The question now is how NTDC will be held accountable for past planning failures, delays and flawed decisions.
The institution has changed its form. The new entities can easily argue that these decisions were made before their creation.
This is the familiar institutional pattern in which names change and structures change, but accountability remains absent.
It is worth noting that the division of NTDC into three separate companies was also presented as one of the major reforms of the current Federal Minister for Energy, Sardar Awais Leghari. When he was awarded the Hilal e Imtiaz, this reform was formally mentioned.
[To be continued in the next episode.]
