Islamabad: Finance Minister Mohammad Ishaq Dar revealed that the government is fully geared towards increasing the country’s existing 19,000 megawatt (MW) power potential to 24,000 MW over the next four years in order to address the country’s growing commercial and industrial sectors energy needs.
Talking to European Investment Bank (EIB) Vice President Magdalena Alverez Arza, the minister said that Pakistan actually has inherited the wrong energy mix which is heavily tilted in favour of expensive thermal power generation that needs to be reversed.
He said that in the short to medium term, the government believes in increasing the country’s power generation potential up to 24,000 MW. Dar said that Pakistan has a generation capacity 19,000 MW on the Indus River cascading down to the plains of the country from its place of origin and this power generation potential can attract overseas investment.
The minister took this opportunity to explain to the vice president of EIB the salient features of the proposed Dasu Hydropower Project which has a predesigned feature of building a water reservoir that can support Pakistan’s power and water related needs if overseas investment also is packaged in it. He explained that the global commercial market and multilateral donors have expressed interest in offering structured investments in Pakistan.
Dar said that the present government in Pakistan has developed a policy whereby local and overseas investors are fully protected. He further said that sovereign guarantees through well designed financial instruments are available and offer attractive returns to the overseas energy sector investors that can secure their investment-related economic interests.
He further briefed the vice president on Pakistan’s recently successful review with the International Monetary Fund (IMF) by completing all significant procedures, entitling release of the third tranche to Pakistan under Extended Fund Facility. Speaking on the occasion, Arza said that her bank would support renewable energy projects in Pakistan since the country has been blessed with tremendous opportunities in renewable power generation sector which need to be fully tapped as it remains unexplored and under-utilised.
She said that the EIB is looking forward to Pakistan’s work on wind power projects to meet its enhanced energy needs, adding that the EIB has a structured mandate to support power projects through capacity building of Pakistan’s relevant stakeholders. Arza shared her bank’s views as to whether Pakistan would prefer to use the same mode of financing as EIB currently is engaged in offering during the course of its energy related investment in Central Asian Republics.
She assured that her bank would analyse Pakistan’s overall renewable and hydro energy generation potential for possible future investment in the country. Secretaries Finance Division, Economic Affairs Division and Water and Power Division were also present in the meeting.