Pakistan’s electricity demand has soared to 20 percent of which the industrial demand alone has increased by 12-13 percent, which may lead to high economic growth.
The Federal Minister for Energy Muhammad Hammad Azhar said this during a meeting with the U.S. Embassy’s Chargé d’ Affaires, a.i. Lesslie Viguerie here on Monday. Secretary Power Division Ali Raza Bhutta, Daniel Froats, Economic Counselor US Embassy and other senior officials were also present during the meeting.
Azhar said that the increase in demand is a very positive sign not only for the economic health of the country but also for the energy sector as it has boosted the confidence of investors. He informed the US chargé d’ affaires that due to prudent policies and effective measures by the government, the circular debt has been reduced by Rs200 billion this year as compared to the previous year. He said that once the growth is arrested, it will be easy to clear the stock. The minister also briefed about an approximate $800 million investment in expansion and improvement of the country’s transmission and distribution (T&D) system in the last two and half years. Another $117 million have been earmarked for next financial year for the improvement of the T & D system. He invited US based companies to explore possibilities of investment in the energy market.
While referring to the close partnership between Power Division and USAID, the federal minister said another milestone for long term energy planning has been achieved with their assistance in the shape of Indicative Generation Capacity Expansion Plan (IGCEP) which is bound to address many issues relating to planning and demand assessments. Azhar said Pakistan’s new Renewable and Alternative Energy Policy has set ambitious targets to enhance the share of renewable energy up to 30 percent by 2030 which will have direct implications for the clean and green initiatives that Pakistan is embarked upon. He said that it will not only tap the indigenous energy potential but will also offer good returns on investment.
Embassy Chargé d’affaires, ai. Lesslie Viguerie appreciated the government policy of giving preference to clean and green energy sources. He said that American companies are taking keen interest in the energy sector. Viguerie said the effective policies of Pakistan’s government to arrest the growth of circular debt is sending positive signals to the investors.
Earlier at a press conference, Hamad Azhar announced that the Council of Common Interests (CCI) has unanimously approved National Electricity Policy 2021.
Azhar said the new electricity policy will be effective for 10 years and under the policy new projects will get approval in a transparent manner. In the light of new policy, he added, the policies for sub sectors will be devised. Due to this, Hammad further said, people will get low priced and environment friendly electricity. He also said that privatization of power distribution companies is necessary. Our issue is not that of power generation, but financial issues of the power sector. He said that the volume of circular debt is Rs2.6 trillion. Our transmission system cannot transport more than 24,000 MW. He added that there is around Rs2/unit difference between purchase and sale price of electricity.