Unresolved Tariff Issues Hinder US Investment in Pakistan’s Wind Projects


ISLAMABAD: A delegation from the United States Treasury Department, led by Assistant Secretary Brent Neiman, addressed critical power sector challenges during their visit to Islamabad, focusing on issues such as circular debt and tariffs for wind projects.

The delegation’s two-day visit aims to assess Pakistan’s economic situation, the potential for a new IMF program, and the overall business and investment environment. Sources indicate significant disputes between Washington and Islamabad regarding wind project tariffs.

The US has communicated that until the tariff issues for the existing five wind power projects are resolved, Pakistan should not anticipate any investment from the US International Development Finance Corporation (DFC). The DFC has proposed revising the Power Purchase Agreements (PPAs) of its sponsored wind projects, contingent upon concessions from the Government of Pakistan.

The meeting, according to an official statement, sought to explore potential collaborations in the energy sector. Federal Minister for Power Sardar Awais Leghari discussed a reform plan designed to address deficiencies in the power sector, improve Pakistan’s energy mix, and enhance private sector participation in electricity distribution and transmission.

Leghari highlighted ongoing reforms aimed at improving service quality for the Pakistani populace. He also mentioned a debt management initiative involving a fan replacement program to conserve energy and manage seasonal energy demand fluctuations.

The minister emphasized the need for US technical support to tackle the seasonal generation and demand gap and underscored the importance of American assistance in securing international financing for Pakistan’s power sector at more favorable rates.

Story by Mushtaq Ghumman

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