Wednesday, November 24, 2010

Energy sector needs $21.8 billion: US report

Energy sector needs $21.8 billion: US report

ISLAMABAD (November 22, 2010) : Washington has assessed $ 21.8 billion financial requirement for Pakistan's energy sector reforms meant to help it add 6950 MW electricity to national grid in the next three years. The US assessment report forwarded to Pakistan speaks about different projects to overcome its widening energy crisis.

It said the government of Pakistan needs at least $7.7 billion for completing six thermal power projects on top priority basis and another $14.1 billion investment should come from private sector for streamlining the energy sector of Pakistan. The report said that Pakistan did identify the reasons which resulted in worsening its energy crisis in recent years but it did nothing to attract investment to change the situation in its favour by completing much- needed energy producing projects.

The report said "Pakistan has to ensure steady implementation of energy sector reforms and fast tracking of investment to overcome its energy crisis. It is a daunting task but not an insurmountable challenge. Pakistan needs full support of its international development partners to have desired level of investment for energy sector reforms and overcome energy crisis in given timeframe of three years".

According to the US report, Pakistan's energy crisis was identified five years ago. However, lack of concerted focus on essential institutional and governance principles in energy sector, insufficient maintenances and stilted capacity expansion in the recent years has resulted in serious energy crisis in Pakistan. The US administration has also severely criticised the government policy of taking decisions relating to energy projects on political grounds. It said although the government of Pakistan knew well that it was short of gas production, it continued to add new domestic consumers purely on political grounds which is going to widen gas load-shedding during upcoming winter season. The report also questions the government policy of providing gas to some commercial sectors such as fertiliser. It strongly suggests to the government to do away with this policy of preferring one sector over another so that foreign and local investments reaches key projects of energy in the next three years to help come out of energy sector.

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