China power

Chinese investment in the power generation shows a considerable vote of confidence on their part

Prime Minister Nawaz Sharif is travelling abroad in search of solutions to problems at home. He will be acutely aware that one of the central reasons for the rout of the PPP government in the last election was its failure to end — or even mitigate — load-shedding. It was lights out for the PPP and the prime minister will be wanting to avoid any accusations that his government is equally incompetent as its predecessor, hence the chase for power in China. The prime minister went to that country to sign a range of agreements that were to have been signed during the visit to Pakistan of the Chinese President, Xi Jinping, in October, which never materialised.

The ongoing protests in Islamabad stalled the Chinese presidential visit and continue to influence the political climate generally. The agreements that have been signed are for the long-term development of a range of power generators, with a cumulative capacity of 10,000MW. Power generators do not spring up overnight, and it may be several years before power from this sheaf of signings gets to the consumer, and there will be pitfalls along the way.

The huge power deficit that has afflicted Pakistan for many years now is in large part due to many parts of the power generation chain being inoperative. Shortage of natural gas has led to the closure of several plants, and energy managers hope to bring them back online using imported liquefied natural gas. The gap between demand and supply ranges from 3,000-7000MW depending on the season. This is not going to be bridged immediately, but there is a possibility now that load-shedding, if not eliminated, can at least be reduced. Hardware aside, distribution companies are also in need of overhauling. The shortfall in collections has increased by 10 per cent in the last year and the attempt to end circular debt was abortive.

The Chinese will be well aware of the inherent weaknesses in the power generation chain despite which they are prepared to invest close to $100 million. This translates to a considerable vote of confidence on their part. It is to be hoped their confidence is not misplaced.

Published in The Express Tribune, November 11^th, 2014.

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