Pakistan Saves $27 Million in Cross-Border Hydroelectric Power Project

Pakistan has achieved significant financial savings of over $27 million in the Central Asia-South Asia Electricity Transmission and Trade Project (CASA-1000) project after successfully negotiating down contractor claims related to care and custody costs.

The Engineering, Procurement, and Construction (EPC) contractor, a joint venture of Hitachi Energy and Cobra Instalaciones y Servicios, had initially raised its care and custody claims to approximately USD 32.9 million for Pakistan and USD 28.5 million for Tajikistan.

A high-level meeting held on March 9–10, 2026, in Ludvika, Sweden, led to the successful outcome. The Pakistani delegation included Additional Secretary of the Ministry of Energy (Power Division), Syed Imtiaz Hussain Shah, and Managing Director of National Grid Company, Altaf Hussain.

Following negotiations, the parties agreed to cap the total care and custody cost at USD 9 million for both Pakistan and Tajikistan combined, covering the period up to February 2028. This decision is expected to save Pakistan more than USD 27 million while ensuring the continued maintenance and operational readiness of critical high-voltage direct current (HVDC) assets during the interim phase.

The agreement also allows for a limited extension of up to three months beyond February 2028, if required, subject to a 5% monthly escalation in costs.

The CASA-1000 project, which aims to enable electricity trade between Central and South Asia, has faced delays due to geopolitical instability in Afghanistan. As a result, commissioning of the HVDC system is now expected by September 2027, necessitating interim care and custody arrangements to preserve infrastructure readiness.