Pakistan’s energy sector needs $25bln investment: World Bank

ISLAMABAD: Pakistan’s energy sector needs as much as $25 billion of investment to come out of its ramshackle conditions, said a foreign energy expert on Tuesday.
Lead Energy Specialist Richard Spencer at the World Bank, speaking at a solar energy conference, said the energy sector is in a distressed state, “but it opens a lot of investment opportunities for the private sector as well as international investors.”
“The energy mix is titled towards expensive fuel oil accounting for 37 percent [in the energy basket], which leads to cost vulnerabilities,” said Spencer. He said the public sector generation is old and inefficient, while poorly targeted tariff subsidies, which are 0.8 percent of GDP, have worsened the situation.
“Delayed payment is another issue as around 30 percent of the sector’s revenue is stuck in the circular debt,” he added. The World Bank’s energy specialist said the transmission and distribution infrastructure lacks investment “and all these issues are impeding the country’s GDP growth by two percent annually.”
“However, the situation opens up a lot of opportunities for investment,” he said. He added that a significant investment will be coming to the distribution sector, as the government is going for strategic investment in the nine distribution companies. The conference, organised by the Middle East Solar Industry Association in collaboration with the International Finance Corporation and Australian Aid, is aimed at bringing key stakeholders together for the development of alternate energy in Pakistan.