CHINA TO INVEST $15BN IN HYDROPOWER
May 30 - June 5, 2011
China Three Gorges Corp, the largest hydropower developer, is ready to invest $15 billion in Pakistan's troubled energy sector to add 10,000 megawatts to its grid in 10 years.
Pakistan is facing a power shortfall that peaked at between 5,000 and 6,000 MW during the 2011 summer, sparking street protests and adding to the government's problems as it battles a deadly militancy. The power crisis has crippled industry, and frequent power outages last up to 18 hours in some rural areas.
"We have given the company's plan, that in the following 10 years, we can invest $15 billion for 10,000 MW power generation," Wang Shaofeng, vice president of the state-run China Three Gorges Corp Wang said.
According to him, the proposal outlines at least three projects, and may include wind and solar energy developments. He said the specific projects have to be decided jointly by the government and his company. "We would like to have a kind of a deal with the Pakistan government, and if possible also to include the Chinese government."
"Initially we are planning to finance a study for the overall assessment and planning for the power structure and for the distribution system to advise the Pakistani government for the future plan. That will be free of cost, our company will finance that," he said.
He said, "with this investment, and also adding up the efforts made by Wapda (Water and Power Development Authority) and the other IPPs (independent power producers), I think this will finally resolve the problems of Pakistani power shortages in the next 10 years."
The company has already signed a $1.47 billion project for the generation of 720 MW energy, for which tariff negotiations are now being held.
Experts say outdated power grids and rampant electricity theft in Pakistan mean that some grid companies experience line losses of up to 30 to 40 percent.
On the other hand, a total of $6 billion worth of investment is expected from the South Koreans in various energy projects in the Sindh province.
Sources said the Korean Southern Power Company (KOSPO) has signed a MoU with Sindh Board of Investment (SBI) to establish wind power project in Gharo-Keti Bandar wind corridor to produce 2000MW electricity.
"Koreans expressed their desire to invest in energy, coal field development, infrastructure and mass transit system," the sources added.
In the wake of financial constraints being faced by the government, sources claimed that the government could not allocate sufficient funds to some critical ongoing energy sector projects including Diamer Basha Dam, Mangla Raising Project, Chashma Nuclear and National Trade Corridor projects in the budget for 2011-12.
Sources claimed that the government has only Rs18 billion for Diamer Basha Dam during fiscal year 2011-12 for land acquisition but water and power ministry has estimated Rs51 billion for this purpose. The government also has not got sufficient funds for completing Mangla dam raising project and impounded water during next rainy season. For this project, minimum Rs13 billion is required.
According to the sources, owing to limited fiscal space, foreign credit requirements for projects such as Chashma Nuclear (C3, C4), Satellite program of Suparco cannot be met fully. Adequate rupee cover could not be provided to utilize estimated foreign assistance for fiscal year 2011-12 which include increasing volume of flood reconstruction project assistance.
For power sector projects, the indicated foreign aid of about Rs40 billion cannot be budgeted fully due to non-availability of fiscal space. Similarly, the government has provided insufficient funds for water and national trade corridor projects. Inadequate funds have been allocated for government's initiatives, especially in the area of water and power, the sources added.
Federal environment minister Samina Khalid Ghurki says an energy conservation potential of up to 25 per cent has been identified in various sectors of economy and a bill aimed at preventing continued inefficient and wasteful use of energy is likely to be passed by the parliament by the end of next month.
According to her, the proposed Pakistan energy efficiency and conservation bill provides for establishment of institutions and enunciation of mechanisms and procedures to provide for an effective conservation and efficient use of energy.
She said the national energy conservation policy (NECP), prepared by Enercon through an extensive consultative process involving all stakeholders, was a contribution to the national effort to steer the country out of difficult energy supply situation by promoting efficient use of energy resources. The policy enumerates broad guidelines to enhance end-use efficiency in various energy consuming sectors of the economy.
She said that the policy is likely to create an enabling environment to support energy security plans of the government and for effecting a change in course from the present wasteful practices to sustainable energy and environment patterns in the future. She said that energy conservation and energy efficiency was an important element of energy policy, which reduces the energy consumption and energy demand per capita, and thus offsets the growth in energy supply and needs to keep up with population growth. Further, by reducing emission, energy conservation is an important part of lessening climate change.
According to her, Enercon, through the implementation of its wide-ranging activities, made significant contributions to the development of the energy conservation technology and achieved a significant energy saving potential in various sectors of the country's economy. "The impact has been direct and indirect, quantitative and qualitative."
On the other hand, Pakistan industrial and traders associations front (PIAF) has urged the Prime Minister Syed Yousuf Raza Gillani and federal finance minister Dr. Abdul Hafeez Sheikh to focus on power generation in the country, as no measure aimed at economic revival would work in the absence of electricity.
PIAF Chairman Engineer Sohail Lashari, Senior Vice Chairman Nadar Kamal Osman and Vice Chairman Junaid Iqbal Sheikh said that energy was the engine of growth but never ever due attention was given towards this very important area.
The PIAF office-bearers said that acute power shortage not only jammed the industrial wheel but also deprived thousands of daily wagers of their earnings. They said that Syed Yousuf Raza Gillani while assuming the charge of Prime Minister had promised to start work on power projects but no practical steps were taken as yet.
The PIAF leaders said that construction of Kalabagh Dam was imperative to ensure availability of water to the agriculture sector and cheaper electricity to both the trade and industry of the country but present regime shelved this important project with a stroke of pen.
They said that bad law and order situation and high input cost already destroyed the industrial sector while the unprecedented load shedding is adding fuel to fire. They said that the industrialists are aimed at supplementing the government efforts to make the country economically stronger but massive load shedding and hike in the electricity tariff are pushing the industrialists to the wall.
PIAF office-bearers urged the government to prioritize the end of power crisis and take steps for enhancing power generation. Funds should be allocated for the large water reservoirs including Kalabagh Dam in the federal budget 2011-12. In this regard, the government should develop consensus in all federating units by convincing them that this is the only way out of ongoing power crisis.