Pakistan will provide additional guarantees for Turkmenistan's investments in the TAPI project
The Pakistani government has decided to extend the Foreign Investment Promotion and Protection Act (FIPPA), a special piece of legislation, to cover Turkmenistan's investment in the TAPI gas pipeline project, a senior official from the country's energy ministry said on Tuesday, The News International reported.
The move is aimed at making the $10 billion project, which will transport natural gas from Turkmenistan to Pakistan via Afghanistan and India, more financially attractive to international lenders.
Turkmenistan will have 85% participation in the project, and Afghanistan, Pakistan and India will have 5% each.
FIPPA, which was previously enacted solely to protect foreign investment in the Reko Dik copper-gold mine in Balochistan, will provide additional guarantees to Turkmen investment in the TAPI project.
It is noted that Pakistan has already provided protection for Turkmen investments with a sovereign guarantee in accordance with the Host Government Agreement (HGA). However, FIPPA 2022 will serve as a one-stop shop for incentives and guarantees for Turkmen investment in the project.
Commercial and legal experts have been engaged to assess the compatibility of existing GPFA and HGA obligations with the FIPPA incentive package, a process that will be completed by December 31, 2023.
“The SIFC (Special Investment Promotion Council) Supreme Committee will approve the recommendations at its next meeting for final approval by the federal cabinet,” the official told a Pakistani publication.
On June 8, 2023, Turkmenistan and Pakistan signed a Joint Implementation Plan in Islamabad to accelerate work on the TAPI gas pipeline project.
This week, the head of the Afghan Ministry of Foreign Affairs, Amir Khan Mottaki, after a meeting with the head of the Ministry of Foreign Affairs of Turkmenistan, Rashid Meredov, said that work on the implementation of the TAPI gas pipeline project will begin in the near future.
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