Power sector needs new roadmaps

Experts agree privatisation can have snowball effect, incentivise more investors

Zafar Bhutta April 24, 2024
The energy minister pointed out that the government had stopped CPPA-G from buying more electricity because “we want to give the business of electricity selling and buying to the private sector”. Photo: file


The chief executive officer of K-Electric (KE) has stressed that privatisation is the way forward to address the circular debt and formulation of clear long-term roadmaps can expedite the energy sector’s progress.

He stated this while speaking at a panel discussion on the way forward for Pakistan’s power sector at the 7th Leaders in Islamabad Summit on Tuesday.

The panel discussion was led by Federal Minister of Energy Awais Ahmad Khan Leghari, who said that privatisation was a key agenda of the government along with a holistic plan to ensure the stability and efficiency of the power sector in the interest of consumers.

KE CEO Moonis Abdullah Alvi acknowledged that Pakistan had low per capita energy consumption, but it provided an opportunity to draw up policies and roadmaps that could stimulate the economy and drive demand.

Alvi revealed that KE was receiving interest from various entities including international names for its 640-megawatt renewable energy projects, which was a positive sign and reflected the company’s vision to integrate renewables into the energy mix.

Former caretaker energy minister Muhammad Ali cited that minor interventions could have a huge impact, sharing an example of the use of high-efficiency appliances. Replacement of all fans, he emphasised, could result in savings of up to $1.5 billion per annum.

Panelists were keen to highlight KE as an example of successful privatisation to learn more about the challenges and opportunities.

They agreed that kick-starting the process of privatisation could have a snowball effect and incentivise more investors to enter the arena, as was observed in telecom and banking sectors in the past.

The federal energy minister spoke about steering focus towards indigenisation in fuel mix to bring down power generation costs and also mentioned that hydel would be the target for the next six to eight years.

He said that the government was working not just on privatisation but also on creating a business environment for the power sector to thrive.

The minister shared that the Central Power Purchasing Agency-Guarantee (CPPA-G) was soon going to hold consultations with business leaders for a comprehensive, accurate financial model. “The government wants to open the market for the power sector via deregulation,” he said.

He was of the view that cross-subsidy should be discouraged as the government was considering a uniform tariff for the industrial sector.

The minister pointed out that the government had stopped CPPA-G from buying more electricity, adding “we want to give the business of electricity selling and buying to the private sector”.

He held National Transmission and Despatch Company (NTDC) responsible for all the woes in the power transmission system. The minister declared that professionals would be appointed on the board of directors of power distribution companies to bring efficiency to the system.

Association of Chartered Certified Accountants (ACCA) Global Deputy President Ayla Majid discussed the importance of an integrated strategy under the applicable policies and the possibility of enabling incentives for the adoption of energy-efficient resources.

“Investment in transmission and distribution can only be injected by the private sector,” Majid said.

“Jazz is strengthening Pakistan’s digital ecosystem in key areas including fintech, cloud services and data analytics with an overall investment crossing $10.6 billion.

“As a pioneer in converged connectivity and digital services, driving digitalisation virtually across all sectors of the economy and empowering people with digital lifestyles, Jazz, a Veon Group company, remains at the forefront of accelerating Pakistan’s digital economy.”

These thoughts were expressed by Veon Group Digital Operations and Performance Officer Lasha Tabidze at the Leaders in Islamabad Summit.

He highlighted the nation’s vibrant youth demographic and burgeoning tech talent as factors that made a compelling business case for investment in life-enhancing digital solutions in the country.

Tabidze emphasised Pakistan’s potential for digital growth, citing its 64% youth population below the age of 30 years and its position as one of the largest players in the global freelancing industry.

With teledensity reaching approximately 80% and mobile broadband penetration of 55%, Pakistan stands as a fertile ground for a purpose-driven organisation like Jazz to bridge digital divides with impactful, life-enriching solutions, he said.

Tabidze apprised the audience of Veon’s plans to bring generative artificial intelligence to its customers in local languages across its markets, which aligned with its DO1440 strategy, offering digital experiences to the customers every minute of the day.

Published in The Express Tribune, April 24th, 2024.

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