Energy Crisis in Pakistan

Written by Raymond Mobrez, P.h.D, Director

Wednesday, 04 February 2009 17:23 - Last Updated Wednesday, 19 August 2009 10:12

The Senate Standing Committee on Water and Power expressed its disappointment on how the
government has handled the power crisis. According to the committee, the crisis has affected
various sectors of the economy namely the agriculture, textile and manufacturing industries.

Senator Hafiz Abdul Malik Qadri encouraged the government to look into other alternative
sources of energy such as solar, wind and bio fuels.

Ethanol can be one source of bio-fuel and can serve as an alternative to gasoline. Ethanol can
easily be manufactured and comes from common crops such as corn and sugar cane.

The Minister for Water and Power Raja Pervez Ashraf assured the committee that the
government is doing what it can to find viable solutions to this problem. He said that the
government is aware of the importance of having a stable energy supply for it knows that it is a
vital factor to growth and development.

Minister Ashraf has informed the committee of various projects that the government has been
working on to resolve the crisis. One is putting up additional units of about 4,500 MW into the
main grid by December 2009. Another is the Thar Coal project which the government opted for
international competitive bidding.

Furthermore, the Minister left for Dubai on Monday to sign a Memorandum of Understanding
(MoU) with United Arab Emirates (UAE) with regards to the used power plant that UAE will be
donating to Pakistan. The power plant is gas-fired and has a capacity of 320 MW. Both parties
believe that this gift will further strengthen UAE – PK relations.

The crisis has not only affected Pakistan's industries but its foreign direct investment (FDI) as
well. Aside from its usual law and order problem, the energy crisis is becoming another reason
why investors have stayed out of the country.

Board of Investment (BoI) Secretary Tariq Iqbal Puri has stated that FDI is showing a positive
trend in Pakistan. However, Lahore Chamber of Commerce and Industry (LCCI) President Mian
Muzaffar Ali feared that if the government fails to address the country's worsening law and order
dilemma and the energy crisis that it now faces, investors will no longer consider to invest in
Pakistan.

This puts pressure on the Pakistani Government to come up with sustainable and viable
solutions in order to achieve growth and development in the future.

Source: asiaecon.org
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