CONSUMERS TO FACE ENERGY OUTAGES IN RAMAZAN
Pakistan Muslim League-Nawaz (PML-N)’s much-trumpeted election agenda was to eliminate energy shortages from the country. However, four years have gone since the current government came to power, the country is still facing a shortfall of 5,000 megawatts, leading to average power outages for 10 hours a day. Speaking in a meeting of the National Assembly Standing Committee on Water and Power, chaired by Arshad Khan Leghari, on Friday, Additional Secretary Ministry of Water and Power Omer Rasul revealed that at present the gap between power supply and demand stood at 5,000MW and it would be a success if the shortfall was maintained in the summer season this year. Average demand for electricity stood at 17,400MW in April compared to generation of just 11,900MW, leaving a gap of more than 5,000MW. However, “in May, 1,200MW will be added to the national grid,” he said. “Consumers in urban areas will experience four hours of load-shedding while those in rural regions will face six hours of outages,” he said. He expected the electricity demand to surge to 24,000MW in the summer season this year compared to 23,000MW last year.
NAWAZ SAYS ENDING ENERGY CRISIS IS HIS PRIORITY
Expressing hope that fast track constructions of power projects will significantly help overcome the energy crisis, Prime Minister Nawaz Sharif has claimed that addressing energy shortfall is his government’s top priority, source said to Research Analyst-PAGE. The PM was talking to Yan Zhiyong – chairman board of directors and president of the Power Construction Corporation of China – who called on the prime minister along with a delegation on Friday. According to a statement released by the PM House, Nawaz Sharif reiterated that Pakistan was fully committed to the timely and effective implementation of all the projects under the China-Pakistan Economic Corridor (CPEC). We thank Chinese ministries and institutions for their support in making the CPEC a reality, he said. Sharif said the government will extend full cooperation for early execution of the ongoing projects and invited the Power China to explore investment opportunities in transmission lines and hydro power projects including water reservoirs and power generation components, source added to him.
MOU TO BE SIGNED FOR EQUITY FINANCING OF STARTUPS THROUGH PSX
The Punjab Information Technology Board (PITB) and Pakistan Stock Exchange (PSX) agreed in principle to sign a Memorandum of Understanding (MoU) to facilitate startups in raising equity from the capital market, marking a move towards facilitating entrepreneurs in the country. This was stated by PITB Chairman Dr Umar Saif on Friday during the 4th Roundtable Conference powered by TechHub. Saif said that this partnership would serve as an important step towards encouraging entrepreneurs seeking to raise investment locally, and would give a major boost to small and medium enterprises, the IT industry and the national economy. He further informed that on signing the MoU both the parties would collaborate and endeavour to facilitate technological entrepreneurship in Pakistan and nurture an ecosystem for the growth of technology startups. Under the proposed MoU, the PITB would share its database of registered startups so that they can sign up on the online PSX Private Market. The launch of the private market is subject to the PSX Board and SECP’s approval. Additionally, PITB’s technology incubator, accelerator, co-working space shall collaborate with the PSX to promote the growth of startups. The parties may coordinate for exploring ways and means to initiate common business support programs/projects for startups. The parties may consider organising joint events (e.g. conferences, workshops) with representation from both parties in promoting entrepreneurship. Moreover, the PSX and PITB will jointly create awareness amongst stakeholders regarding the three capital raising platforms offered by the PSX such as the main board (first tier), SME board (second tier) and private market (third tier).
GERMANY ANNOUNCES €109 MN FOR PAKISTAN
Germany announced a financial package of €109 million for Pakistan in order to develop economic ties between the two countries, source said to Research Analyst-PAGE. The Declaration of Intent, which was signed following a meeting between Finance Minister Ishaq Dar and German Federal Minister for Economic Cooperation and Development Dr Gerd Muller on Thursday, promises €109 million to Pakistan in the next two years. Muller proffered the prospect of new funding for bilateral technical and financial cooperation, said an official handout issued by the German Embassy in Islamabad. The bilateral economic cooperation could reach a significant level of up to €109 million for the two-year period of 2017-2018. The declaration reiterates the three priority areas for cooperation which include governance, energy and sustainable economic development. Both sides renewed their intention to continue their successful cooperation in order to meet Pakistan’s socio-economic development challenges, in coherence with Pakistan’s Vision 2025 and the internationally agreed Sustainable Development Goals. On the occasion, Dar appreciated the cooperation and support of the German government for various development projects in Pakistan, including the recent equity participation by KfW Development Bank in Pakistan Microfinance Investment Company. After having achieved macroeconomic stability in Pakistan, the present government is now focused on attaining higher, sustainable and inclusive economic growth, he said. We are currently focused towards promotion of financial and digital inclusion in the country. This is evident from the IT Park project in Islamabad which is being implemented with loan assistance from the Korean Exim Bank. The finance minister emphasised that the country has a liberal investment regime and invited German companies to invest, particularly in the automotive and the solar photovoltaic sectors, source added to him.
PAKISTAN-UKRAINE RELATIONS: PUTIC AIMS TO STRENGTHEN ECONOMIC TIES
Pakistan-Ukraine Trade and Culture Information Centre (PUTIC) is exploring trade and investment opportunities on both sides in an effort to strengthen economic ties between the two countries. According to Honorary Consul General of Ukraine MA Jabbar, both countries have tremendous potential to benefit from a bilateral relationship. There is a huge potential for economic cooperation between Pakistan and Ukraine and the two business communities can enter joint ventures in various sectors, he said. We will continue to put in efforts for promotion of trade and investment between the two countries. Meanwhile, PUTIC’s senior official Sohail Shamim Firpo said the centre aimed at creating awareness about bilateral trade and investment opportunities in order to encourage foreign investment in Pakistan. He added that they want to assist both nations in exploring each other’s markets.
TO REPAY EUROBOND DEBT, PAKISTAN PROBABLE TO BORROW $750M FROM CHINA
Pakistan may borrow another $750 million as a short-term foreign commercial loan from China, ironically to pay back the Eurobond debt incurred during the rule of Gen (retd) Pervez Musharraf, also underscoring that the country is no more able to retire its debt from own resources. Due to the relatively low cost of borrowing from foreign commercial banks, the government is considering taking another commercial loan to return $750 million Eurobond debt, said sources in the Ministry of Finance. In 2007, the Musharraf government had issued 10-year bonds at a 6.875% interest rate, maturing on May 24 this year. Earlier, the Finance Ministry had a plan to issue another sovereign bond equivalent to $750 million to return the previous debt. The country’s Foreign Economic Assistance Plan for fiscal year 2016-17 included a $1 billion sovereign bond and a $750-million Sukuk bond. In September last year, the government raised $1 billion by floating Sukuk bond at 5.5% interest rate. It has not yet called the bids for hiring financial advisors to float another international bond. The possibility is that the government will get this loan from China, which could be the third major borrowing from Beijing in the past six months, said sources. Earlier, Chinese banks gave $1.3 billion to support the balance of payments situation and providing a cushion to foreign currency reserves. Compared with borrowing through international bonds, taking loans from the commercial banks is hassle free, sources said. The government also opted for short-term foreign commercial bank loans to avoid scrutiny that it had to face after its second last launch of $500 million Eurobond in September 2015.
PAK COULD SOON SEE THESE ELECTRIC CARS ON ITS ROADS
Pakistan could soon see electric cars plying on its roads as the maker of Super Power motorcycles displayed two variants it intends to start selling within the next three months. The electric cars are currently on display at the ’14th My Karachi-Oasis of Harmony’, a three-day exhibition that was inaugurated on Friday at the Karachi Expo Centre. The compact vehicles can go up to a maximum of 50kmh and would need to be charged for seven hours to travel a distance of 120kms. Its target market is not specific. People from all age groups can drive this car,” N.J Auto Industries Marketing Executive Abdul Muqsit told to Kamal Hayder, Research Analyst-PAGE. One of the cars is a two-door variant, the price of which is Rs600,000, while the four-door variant has price a tag of Rs650,000. We believe the market for E-cars market will grow much faster in the coming years so we have decided to enter this market,” he said, claiming that the vehicles boast a cost-efficient fuel mileage of Rs1 for a kilometre. The company is currently hunting dealerships, a separate section of authorised outlets other than its motorcycle business. The battery of these cars is 12 volts, and can be charged in homes like an inverter (popularly known as UPS) is, said Muqsit, adding that there is no dependency on an outdoor station or dock. The cars are being imported from China – by far the largest market for electric cars in the world. In fact, the Chinese market is bigger than all the world markets combined. Apart from private sector research, the electric car industry also got a boost from billions of dollars in government support since 2000. Annual electric car sales in China have crossed 400,000 and the government is targeting 5 million vehicles on its roads by 2020.
AMERICAN ENVOY UNDERLINES INNOVATION AS KEY TO GROWTH IN PAK
US Ambassador David Hale has reiterated the country’s commitment to Pakistan’s development and has stated that the two countries are closely aligned. According to Hale, the key to Pakistan’s economic development is sufficient emphasis on innovation. He said this at the opening of the two-day ‘Leaders in Islamabad Business Summit’ organised by the Nutshell Forum in collaboration with the Ministry of Planning, Development, and Reform in Islamabad. Ambassador Hale further said that the countries should work towards fostering economic growth, increasing bilateral trade, improving the investment climate, protecting intellectual property and promoting entrepreneurship. Highlighting the untapped potential for growth in the US-Pakistan economic relationship, Ambassador Hale observed that American companies are increasing their presence in Pakistan. The envoy added that from some of our largest manufacturers and infrastructure companies, to small and medium services companies, the American private sector sees Pakistan as an increasingly attractive market. American business leaders praise the quality of people that they work with, and the interest that Pakistan’s business community has shown in American products.