Islamabad, Aug 5: It is positive that the new fiscal year has begun with an emphasis on economic stability and improvement. But the much-needed expansion of the economy has not materialized. However, PM Shahbaz has made it clear in his meetings with the Special Investment Facilitation Council (SIFC) that the nation is committed to removing obstacles in order to draw in capital investment, particularly in the energy sector.
The Federal Government’s privatization strategy is receiving a lot of attention, and DISCOs are always at the top of the list. Federal Minister Awais Leghari has taken a practical stance amidst the power sector’s many obstacles, such as capacity payments and IPPs, making sure that the privatization of DISCOs has not been sidelined.
Although the process of privatization will take time, the long-term advantages for many industries, the nation, and individual businesses are immeasurable. The recent announcement that K-Electric had received fifteen bids for its renewable energy projects serves as an excellent example of how privatization may be beneficial in drawing in capital.
A good example for others to follow was established by domestic and foreign investors who were eager to collaborate with the company on the first phase of its 640 MW of renewable energy projects. KE has received bids for solar projects in Balochistan with a capacity of 150 MW. More parties ought to take into consideration the second batch of 270 MW projects in Sindh, which are still up for grabs.
It should be noted that the company’s wider Power Acquisition Program, which intends to add 1300 MW of renewable energy in the next five years, includes these 640 MW projects. Over the next ten years, the government also intends to make a major shift to renewable energy.
These kinds of partnerships can be very beneficial to the industry as a whole. The last three years have seen an average of $19 billion in oil import bills for the nation (coal excluded). Using more renewable energy can lessen this load as production shifts to domestic sources.
A government policy that consistently mandates renewable energy will have significant benefits and offer a path for sustainable investment. The World Bank and the Sindh Government are collaborating on the massive Sindh Solar Energy Project (SSEP) at the provincial level. On Sindh’s Keenjhar Lake, a 550 MW floating solar project the first of its kind was inaugurated last month.
The provincial initiatives are a positive start. Encouragement of utility-scale renewable energy projects can contribute to national energy production cost reduction. The annual increase in tariffs must be stopped, and the energy mix must be optimized to give consumers respite through fewer fuel charge modifications.
Important government figures exhibit a long-term, goal-oriented mindset. Encouraging policies that can promote privatization and increased cooperation between these organizations are required to support this approach. This is significant because strengthening the transmission network and transitioning the generating value chain require capital investment in order to lower distribution line losses. For the time being, we are hopeful about the future and how investor interest will develop.
