Energy sector needs over $14 billion

ISLAMABAD: The country’s power deficit is expected to increase by 64 per cent within the next two decades due to a shortage in energy supply over demand.

According to estimates, investments of over $14 billion will be required over the next 10 years to deal with the growing demand for electricity. The shortfall is likely to go up by more than 20 per cent in less than five years from now.

This was said by Zahid Maqbool, President of the Islamabad Chamber of Commerce and Industry (ICCI), while chairing a meeting of the chamber’s sub-committee on energy.

Maqbool highlighted that many rapidly growing developing economies like India, China and Russia had realised the importance of energy for business and industry and were taking all possible steps to increase energy supply. Meanwhile, Pakistan was still lagging behind in efforts to overcome the energy deficit.

He pointed out that the contribution of electricity and gas generation to Gross Domestic Product (GDP) growth for 2009-10 had already shown a declining trend. It was claimed that if the current trend of regular and prolonged power outages continued, it would prevent industrialists from meeting production targets while agricultural productivity would also decline. This could result in the missing of export targets, severely impacting GDP growth.

He said investment of the private sector in electricity and gas had registered a decline of 18 per cent while public sector investment in this sector had also dropped three per cent during 2009-10.

He said the government should reverse these dangerous trends by announcing more incentives for investment in the energy sector through public-private partnerships so that the country could become self-sufficient in energy generation.

Published in The Express Tribune, July 18^th, 2010.