Power shortfall: US asks for political will to resolve the energy crisis

Immediate investment of $6 billion will solve Pakistan’s energy crisis: USAID.

Our Correspondent March 31, 2012


US has asked Pakistan’s legislators to extend support and bring reforms in the energy sector to overcome the 3,800 megawatt power shortfall and with it the 10 and 12 hours daily outages, according to a report.

According to a report “Pakistan – US Energy Programme” submitted to the Ministry of Water and Power, extended political support and commitment will ensure a market-based economy. This gives the system more freedom as prices are determined by the law of supply and demand rather than by the government or a regulating body.

USAID also mentioned that 50 million Pakistanis are without access to modern energy services and the country requires $6 billion immediate investments in power generation to end the energy crisis.

A senior official of Ministry of Water and Power quoting the report said that USAID authorities informed that Pakistan’s energy sector was not supporting the country’s economy. Pakistan is spending $15 million daily on oil imports to generate power in the country.

“Pakistan is facing distribution losses of $7 million per day and the amount of subsidies in power sector stands at $4 million per day,” reveals USAID’s report adding that circular debt is increasing $6 to $8 million per day. The report study further reveals that country’s economy is facing a loss of $ 15 million to $ 20 million per day due to energy shortages.

“Governance, corporate autonomy, legal framework and institutional independence should be ensured by taking different measures through key reforms,” USAID authorities say adding that government also should introduce reforms to bring accountability and transparency and financial sufficiency. They also urged private sector participation in energy sector by opening arms to investment that will on the side increase services as well.

Power generation stands at 70% of the total generation potential in Pakistan due to issues including use of alternative fuels by power plants and poor management.

As a short term measure, USAID proposed to identify market opportunities for new customers and design energy efficiency projects. In the long-term, power projects should be initiated to bridge supply and demand gap.

USAID has also proposed to enable investment climate, public-private partnerships and innovative agreements. “Facilitate access to large funding sources of donors and enhance the energy sector reform programme,” study adds.

Published in The Express Tribune, March 31st, 2012.


Cautious | 9 years ago | Reply

@Parvez. Look in the mirror - the American govt didn't force you to elect a group of inept and corrupt individuals. Your President has a nickname that the moderators won't allow posted - but that nickname implies he was corrupt long before you put him in office.

Parvez | 9 years ago | Reply

As long as the U.S keeps supporting this corrupt government, nothing positive will happen.

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