Turkmenistan has sought legal coverage under the Foreign Investment Promotion and Protection Act (FIPPA), 2022
- Turkmenistan requested legal coverage under FIPPA, 2022.
- Turkmenistan’s demands were put to the SIFC.
- SIFC had decided to seek input from all concerned.
ISLAMABAD: The Petroleum Department has sought the input of the Legal Department on Turkmenistan’s request for legislative coverage under the Foreign Investment Promotion and Protection Act (FIPPA), 2022 for the investment it plans to make in Pakistan under the TAPI trans-state gas pipeline project $10 billion, it has been reported The news the manufacture.
The pipeline from Turkmenistan must pass through Afghanistan, Pakistan and India. Turkmenistan will have an 85% stake in the project, while Afghanistan, Pakistan and India have 5% stakes of $200 million each.
“The Petroleum Directorate has consulted the Legal Directorate and is awaiting its response on Turkmenistan’s request and will then be able to confirm its recommendations to be submitted to the Special Investment Facilitation Board,” a senior energy ministry official said. . The news.
“Earlier, the demand from Turkmenistan was put to the SIFC, which decided to seek input from all stakeholders and make recommendations to the SIFC High Committee.”
The FIPPA Act was passed by the government to extend special treatment to protect foreign investment to the Reko Diq project. The bill was passed by parliament to give legal cover to the Reko Diq project, a copper and gold mine in Balochistan being developed by a consortium of foreign companies.
The official said the statutory cover given to the Reko Diq project was a special case and could not be extended to every investor.
“If Afghanistan and India, which are also part of the TAPI gas pipeline project, extend the same legislative coverage to Turkmenistan’s investments in the pipeline, then Pakistan may not object,” the official said.
Pakistan has already ensured the protection of Turkmenistan’s investments with a state guarantee under the Host Government Agreement (HGA).
However, the official believes that if the pipeline project is covered under the 2022 FIPPA, then it can help Turkmenistan increase the credibility of Turkmen gas companies before banks for feasibility and loans.
The $10 billion natural gas pipeline project will be constructed and commissioned with a 30%:70% equity and loan business plan. Of the 30% equity, Turkmenistan has a share of 85% and Afghanistan, Pakistan and India each have a share of 5%. The share capital of Pakistan is 200 million dollars.
The remaining 70% of the funding will be based on loans organized by the TAPI consortium from international financial institutions.
The project has been delayed for almost 7 years, mainly due to the failure to close the finances and the Taliban takeover in Afghanistan.
The Asian Development Bank (ADB) has suspended due diligence and processing activities for the TAPI project until the Taliban-led government of Afghanistan is recognized by the United Nations and the world’s major economies.
However, Turkmenistan and Pakistan on June 9 this year signed a Joint Implementation Plan (JIP) to speed up work on the project in Islamabad.
Pakistan has proposed that Turkmenistan give up part of the gas line to Herat in Afghanistan to ensure ownership by the Taliban, which will also help push the project forward.
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