Leading international and local experts in the energy, power, infrastructure, risk management, and insurance sectors have urged for the promotion and assurance of privatising all government departments to address both the energy and economic challenges of the country.
They said this during presentations at a conference titled: “Energy Summit ‘24,” focused on fostering growth, collaboration, and resilience in Pakistan’s energy mix. The event, held at a local hotel in Karachi on Tuesday, was hosted by Fidelity Insurance Brokers/Lockton.
They also stressed the need for rightsizing staff in government departments and privatising them to tackle energy challenges effectively.
For the past 20 years, Pakistan has consistently ranked among the top 10 most vulnerable countries on the Global Climate Risk Index. Floods have severely compounded the economic challenges of the country, inflicting a severe exogenous shock. The World Bank has estimated Pakistan's flood losses at $30 billion.
Read: Govt mulls privatisation of 10 Discos
Speaking about proposed solutions to the energy crisis, Lucky Electric Power Company Limited, CEO, Ruhail Muhammad said resolving the power sector issues will require significant time and political will. The Pakistan Business Council (PBC) has analysed the situation and presented recommendations that can be implemented in the short to medium term to improve the current situation. Muhammad stressed the need for reducing transmission and distribution (T&D) losses to 15% and improving recovery targets to 93%, which would translate into Rs175 billion in annual savings. Lowering tariffs in winter months to optimise capacity usage could potentially increase power revenue by approximately Rs17.5 billion for every 1,000MW incremental demand.
He also highlighted the importance of increasing reliance on local Thar coal to reduce the outflow of valuable foreign exchange. Although he acknowledged the substantial initial investment required to convert power plants to 100% local coal, he highlighted the long-term sustainable benefits.
Discussing the insurance sector’s role in addressing climate change, Zurich Insurance Co Chief Underwriting Officer Pavel Chernoverkhskiy said the insurance sector has a vital role in sharing expertise and coordinating efforts between stakeholders. He proposed a data-led approach to increase resilience across an organisation’s value chain. Chernoverkhskiy noted that insurers can build recovery coalitions among policyholders, authorities, and communities with networks cultivated over decades.
Fidelity Insurance Brokers CEO Khurram Ali Khan underscored the significance of insurance in driving investments, stating, “Insurance is the backbone of the economy.” He urged all stakeholders and energy users to play a role in overcoming the energy crisis.
Thar Coal: Pakistan's 6th largest coal reserves, over 9,000 kilometers, hold around 175 billion tonnes of lignite coal, crucial for energy security. Thermal: Declining natural gas reserves reduce its dominance, while nuclear energy grows. LNG imports tackle gas shortages. Renewables: Solar and wind see increased investments, shifting towards sustainable energy.
Published in The Express Tribune, March 6th, 2024.
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