WASHINGTON: The US said on Tuesday it does not support a Pakistan-Iran gas pipeline project from going forward and cautioned about the risk of sanctions in doing business with Tehran.
WHY IT IS IMPORTANT
The Pakistan-Iran gas pipeline, known as the Peace Pipeline, is a long-term project between Tehran and Islamabad, and has faced delays and funding challenges for several years. The pipeline would transport natural gas from Iran to neighboring Pakistan.
Iran and Pakistan had signed a five-year trade plan in August 2023 and set a bilateral trade target at $5 billion.
Pakistan’s Petroleum Minister Musadik Malik said this week that his country was seeking a US sanctions waiver for the gas pipeline from Iran.
KEY QUOTES
“We always advise everyone that doing business with Iran runs the risk of touching upon and coming in contact with our sanctions, and would advise everyone to consider that very carefully,” a US State Department spokesperson told reporters in a press briefing.
“We do not support this pipeline going forward,” the spokesperson added, saying that Donald Lu, the State Department’s top official for South and Central Asia, had said as much to a congressional panel last week.
CONTEXT
A few weeks ago, Pakistan and Iran engaged in tit-for-tat strikes when they exchanged drone and missile strikes on militant bases on each other’s territory.
Washington’s relations with Iran have been thorny for a long time and the US has issued multiple rounds of sanctions on Iranian entities.
Officially allies in fighting extremism, Pakistan and the US have had a complicated relationship over the years, bound by Washington’s dependence on Pakistan to supply its troops during its long war in Afghanistan but plagued by accusations Islamabad played a double game.
Some Pakistani politicians have also accused Washington of meddling in Pakistan’s domestic politics, charges that Washington denies.
US says it doesn’t support Pakistan-Iran gas pipeline project going forward
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US says it doesn’t support Pakistan-Iran gas pipeline project going forward
- US State Department cautions about the risk of sanctions in doing business with Tehran
- Pakistan-Iran gas pipeline has been facing delays and funding challenges for several years
Pakistan, ADB sign $730 loan agreements to boost SOE reforms, energy infrastructure
- Both sign $330 million Power Transmission Strengthening Project and $400 million SOE Transformation Program loan agreements
- Economic Affairs Division official says Transmission Project will secure Pakistan’s energy future by strengthening national grid’s backbone
KARACHI: Pakistan and the Asian Development Bank (ADB) on Thursday signed two loan agreements totaling $730 million to boost reforms in state-owned enterprises (SOEs) and energy infrastructure in the country, the bank said.
The first of the two agreements pertains to the SOE Transformation Program worth $400 million while the second loan, worth $330 million, is for a Power Transmission Strengthening Project, the lender said.
The agreements were signed by ADB Country Director for Pakistan Emma Fan and Pakistan’s Secretary of Economic Affairs Division Humair Karim.
“The agreements demonstrate ADB’s enduring commitment to supporting sustainable and inclusive economic growth in Pakistan,” the ADB said.
Pakistan’s SOEs have incurred losses worth billions of dollars over the years due to financial mismanagement and corruption. These entities, including the country’s national airline Pakistan International Airlines, which was sold to a private group this week, have relied on subsequent government bailouts over the years to operate.
The ADB approved the $400 million loan for SOE reforms on Dec. 12. It said the program seeks to improve governance and optimize the performance of Pakistan’s commercial SOEs.
Karim highlighted that the Power Transmission Strengthening Project will enable reliable evacuation of 2,300 MW from Pakistan’s upcoming hydropower projects, relieve overloading of existing transmission lines and enhance resilience under contingency conditions, the Press Information Department (PID) said.
“The Secretary emphasized that both initiatives are transformative in nature as the Transmission Project will secure Pakistan’s energy future by strengthening the backbone of the national grid whereas the SOE Program will enhance transparency, efficiency and sustainability of state-owned enterprises nationwide,” the PID said.
The ADB has supported reforms by Pakistan to strengthen its public finance and social protection systems. It has also undertaken programs in the country to help with post-flood reconstruction, improve food security and social and human capital.
To date, ADB says it has committed 764 public sector loans, grants and technical assistance totaling $43.4 billion to Pakistan.
