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It is currently facing a number of challenges of the national economy, which is from chronic mismanagement and financial instability to policy uncertainty and technical disqualification. There is a dire need for modern energy infrastructure. However, proper investment in this sector is vague.
Indicators are not less than $ 72 billion during the expansion plan (IGCEP 2024-34) and the transmission system extension plan (TSEP 2024-34) during the decade of Pakistan. This investment is needed to increase breeding and grid capacity, renewable energy integration and transmission upgrade.
The Special Investment Facility Council is trying to attract foreign investment in this sector. However, recent intervention has damaged investors’ confidence.
On the front of the race, the government is discussing agreements with free power generators. This has led to intelligent distrust among investors, and it is feared that future agreements may be subject to change and create an incredible market impression for long -term energy investment.
The renewal has sabotaged the reputation of independent guarantees, which was previously considered by the state of Iron Cloud.
The coalition of international lenders, including the Asian Development Bank, has sent a harsh letter to key government ministers, which can lead to serious consequences for the sector by neglecting borrowers who amended renewable energy contracts.
Development finance agencies wrote, “We believe that changing power procurement agreements (PPA) in a non -joint style will be detrimental to the long -term development of the sector, which will damage investors’ confidence and discourage the most important private investment in the future.”
Another issue is that K -Electric is a recent achievement that attracts the lowest bid for its 640 MW renewable energy projects in Pakistan.
The destiny of these low -cost clean energy projects is now hanging in balance as the delay in approval of NEPRA and the uncertainty of their involvement in the IGCEP is preventing the implementation of these projects.
Recognizing the strategic importance of these projects, the governments of Sindh and Balochistan have appealed to the federal government to join the IGCEP.
A transparent, investor -friendly policy framework that guarantees the implementation of the contract, reduces bureaucratic barriers and ensures that financial stability is the only way to attract long -term investment.
The bureaucratic delay is not only a hindrance to the cheap renewable energy transfer, but also sent a strong obstacle to potential investors, reinforcing the idea that even highly competitive and well -made projects are regularly connected and uncertainty of policy.
The situation on the partition front is just as serious. The government is trying to offload the struggling power distribution companies. A ministerial committee has recently recommended privatization instead of transferring to the provincial governments, and has argued that there is nothing to transfer the financial burden from one government to another.
The Government of India has refused to take the loss of Hyderabad Electric Supply Company and a score electric power company, citing its failure to maintain its growing losses. This indicates the absence of a viable strategy to resolve the crisis, and these companies are left in the state of operational stroke, with no clear path ahead.
Minister for Power Sardar Ausis Ahmad Khan Legree has recently announced that Islamabad Electric Supply Company, Gujranwala Electric Power Company and Faisalabad Electric Supply Company have faced privatization within a year. However, when Pakistan moves to the competitive bilateral agreement market, a significant structural error threatens success.
Under the current framework, the disco is expected to become the last resort (solar) supplier. However, they will be prevented from competing with those entering the new market in their service areas. This makes their financial stability effectively disabled, as newcomers will select the high recovery users select, which causes the burden of less maintenance and more losses.
If a basic flaw is left baseless, how can anyone expect the privatization of the disco so that the proposed market structure guarantees their financial failure.
The power sector is at an important confluence. Without serious structural reforms, the country will continue to struggle with chronic energy shortages, rising electricity costs and growing investors.
A transparent, investor -friendly policy framework that guarantees the implementation of the contract, reduces bureaucratic obstacles and ensures financial stability of power sector companies, the only way to attract long -term investment.
The government should give priority to the grid modernization, ensure regulatory consistency and implement market -based reforms to restore investors’ confidence. The failure to take a decisive action will not only deepen the current crisis but will further pushing Pakistan’s energy sector to economic and operational elimination, which makes it difficult to achieve the target of investing $ 72 billion.
The author is a senior economic representative in the news. They tweeted @jawwadrizvi
