The vibrant energy sector is likely to attract
foreign investment well over $11 billion during the next five years in
The assessment regarding forthcoming investment in
the energy sector was made by Liaquat Ali Khan Jatoi, Federal Minister
for Water and Power in Islamabad last week.
Outlining the overall picture of the energy sector,
he disclosed that besides an investment of over $3 billion, which was
currently in the pipeline, the international energy players from the
United States and the UK have also come up with a plan to invest
dollar one billion in two different energy projects.
The flow of foreign investment in the energy sector
was actually the outcome of the efforts being made by the government
with a focus to meet the growing energy demand especially the power in
Prime Minister Shaukat Aziz, while talking to the
minister for Water and Power in a recently held meeting at Prime
Minister's house underlined the need for large scale investment in the
energy sector to match the energy requirement of the country.
With the accelerated economic activities, the
demand for power will naturally increase. In the backdrop of the
growing economic activities, Pakistan needs to act in a pre-emptive
manner to ensure that the equation between demand and supply was not
impaired due to scarcity of energy resources. There was an ample scope
for investment in the power sector especially in view of lucrative
returns offered by this vibrant sector of the economy. During a
meeting, the Minister for Water and Power spelled out the aggressive
marketing campaign launched by Pakistan including the road shows on
investment potential in power plants recently organized in Dubai and
his meetings with leading investors of Middle East and the European
According to Liaquat Jatoi, an American company AES
has shown interest in developing and implementing 1,000MW coal-based
power project in Thar, which would bring an investment of over US$ 1
Similarly, a British company Globe leg has also
announced to invest US$ 1 billion in the power sector, while a bidding
for the Neelum Jhelum Hydel Power Project is also scheduled on April
30. Applications for international bidding of this project will be
received till April 15. The cost of the project having a generation
capacity of 969MW was estimated at $1 billion.
The road shows staged in Dubai and London has
succeeded in inviting the attention of the investors towards power
sector in Pakistan. The attractive features of the three major
projects presented in the road shows were of the special interest of
the investors: These three projects are including Uch Two power
project with 400-500MW, Faisalabad (oil/gas) Power Project of 450MW
and Lahore dual-fuel Power project with a capacity of 350-400MW. The
estimated cost of Uch-2 project is US$ 375 million, Faisalabad project
$360 million while the cost of Lahore project is $ 320 million.
In addition to these three major projects, several
other small and medium hydel power projects were also presented in the
road shows with a total capacity of about 1800MW along an estimated
investment of US$ 2.25 billion. Besides gas and hydel projects,
investment opportunities in five coal blocs were also highlighted.
Pakistan was set to attain a growth rate of 8
percent during the next three years as against 7 percent in the
current fiscal and 6.4 percent of the last year. The increase in
growth rate was in fact a reflection of the growing economic activity
in the country, which when compared with the growth rate of the 90s,
having dramatically changed the economic scene in Pakistan.
Macroeconomic stability and structural reforms as pursued by the
government have been instrumental in breaking the vicious cycle that
had been eroding the fundamentals of the economy. Credit for bringing
an economic turn around, however, goes to the dynamic financial and
economic vision of Prime Minister Shaukat Aziz.
However, the economic managers will have to ensure
effective implementation and follow up of this attractive economic
decision so that the flow of investment was not disturbing in the days
The Prime Minister's focus on energy appears to be
a manifestation of his resolve to take the growth to 8 percent which
will definitely result in increase of demand for energy in foreseeable
future. Unfolding his 5 years development strategy about two weeks
back, the Prime Minister had disclosed that augmentation of the energy
resources was the priority area of the development plan.
"Providing adequate water was of the highest order both for
drinking and irrigation purposes."
The significant role of electricity, gas and
hydrocarbon has to be accorded with due recognition, as the economic
growth is tied up with the growth of the energy resources in the world
economies. The only area which needed to be given special attention by
the people at the helm of affairs was the affordability of the power
price in Pakistan as an expensive energy may not produce the desired