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Thursday March 28, 2024

Energy fund being created for infrastructure development

By Munawar Hasan
June 14, 2016

LAHORE

The Punjab government is working with leading International Financial Institutions (IFIs) to create an energy fund of US$ 1.5 to 2.0 billion for the development of energy infrastructure although allocation in provincial development budget for upcoming fiscal is being scaled down if compared with budget estimates with previous financial year. 

According to budget documents, this initiative is going to be a huge step forward contributing to improve the provincial financial indicators and boost the investors’ confidence. In conjugation to federal efforts to bridge the current shortfall of electricity and to support tremendously growing future demand, it states, government of Punjab has taken multiple initiatives both in public and private sectors to promote and strengthen power industry in the province.

We are on a path to make Punjab an energy secured area, it is claimed. In addition to public sector spending the provincial energy department has established one window service and fast track & transparent processing to streamline the private investment in the area of Energy Sector.

During the FY 2015-16, Rs 31 billion were allocated in this sector. Major programmes included the establishment of RLNG Power Project at Bhikki (Rs 15.00 billion), establishment of coal base power projects, (Rs 9.00 billion) and development of hydel power project under Renewable Energy Development Sector Investment Programme (REDSIP) (Rs 3.5 billion).

It is claimed in budget documents that provincial has succeeded to attract private investment in energy sector and work on a number of power projects are started. These projects are scheduled on fast track completion within 2 to 3 years and over 8000 MW will be added to the National Grid by these private sector projects.

Therefore; allocation for energy sector has been rationalised to Rs 9.00 billion in Public sector for the FY 2016-17, which includes an allocation of Rs 4.63 billion for hydel Power project under REDSIP. The major Targets and Initiatives for 2016-17 include completion of REDSIP hydel power generation project at Marala, Pakpattan, Chianwali&Deg outfall and commencement of RLNG based power project for 1000-1200 MW at Bhikki, Sheikhupura, 15-20 MW Bio Mass Power Project at Faisalabad, Energy Efficiency & Conservation Programme, Construction of Energy Resource Centre, Solar Solution for Basic Health Units in Punjab, and new Initiatives in Energy Sector including development of local resources for electricity production.

It is also stated in the budget documents that energy crises has plagued the economy for many years and hampered it from realising its full potential, stunting not only the growth of economy but also adding to the miseries of citizen and business community. In order to address this crisis, the government has not only initiated energy projects from its own sources but also focusing on providing an enabling environment to attract private sector investment in energy sector.

The major energy projects currently ongoing in Punjab include 1180 MW Bhikhi Power Plant at Sheikhupura, 1223 MW Baloki Power Plant in Kasur, 1320 MW Qadirabad Power Plant at Sahiwal and 1230 MW Haveli Bahdur Shah Plant at Jhang.

The government also achieved a major breakthrough in renewable energy sector when 100 MW Quaide- Azam Solar Power Plant was commissioned in July 2015. This has invited private sector for investment in renewable energy and keeping in view the potential of investment, Government has embarked upon the policy of divestment of Quaid-e-Azam Solar Power Plant.

It is further stated that energy is lifeline of an economy and most vital instrument of socioeconomic development of a country. Pakistan is facing huge crises of shortage of electricity and Punjab is not an exception. Government of Punjab is working along with the Federal Government within the constitutional framework to deal with the crises. Our priorities are to invest public money optimally to increase the generation capacity, enable and facilitate the private sector to invest in this area, promote the energy conservation culture so that the electricity is provided to all consumers including domestic, industrial and commercial users at the best affordable rates, claimed in the budget documents.