New Delhi, May 24 (IANS) Pakistan’s deepening energy crisis and rising burden of circular debt are the result of years of flawed policy decisions, expensive imported fuel dependence and weak regulatory oversight rather than the International Monetary Fund (IMF) alone, according to a strongly worded analysis examining the country’s power sector.

The report cited by The Tribune Express argued that Pakistan’s energy sector problems worsened significantly after the Nawaz Sharif-led government returned to power in 2013 and cleared nearly Rs 480 billion in circular debt within weeks of taking office.

The move coincided with the launch of the China-Pakistan Economic Corridor under China’s Belt and Road Initiative.

According to the analysis, Chinese officials had advised Pakistan to prioritise renewable energy projects such as solar, wind and hydropower.

However, the country instead focused on imported liquefied natural gas (LNG)-based and coal-fired power plants dependent on imported fuel priced in US dollars.

The article claimed that major hydropower projects, including the Diamer-Bhasha Dam, Dasu and Bunji hydropower projects, which together had the potential to generate more than 15,000 MW of electricity, were sidelined in terms of priority and not fully integrated into the CPEC energy portfolio.

It further argued that Pakistan missed an opportunity to retrofit ageing oil and gas-fired power plants in cities such as Faisalabad, Karachi and Muzaffargarh to improve efficiency at a significantly lower cost.

The report contrasted Pakistan’s decisions with neighbouring India’s retrofitting of 17,500 MW of thermal power capacity to deliver cheaper electricity.

The analysis also criticised the handling of Pakistan’s Thar coal reserves. It said China’s Shenhua Group had proposed developing mine-mouth coal power projects in Thar capable of generating electricity at far lower tariffs.

However, the project reportedly collapsed due to tariff disputes with Pakistan’s power regulator, the National Electric Power Regulatory Authority.

The report claimed that Pakistan now pays between 12 and 17 US cents per unit for electricity, significantly higher than the projected cost of power from Thar coal projects.

It also accused the regulator of approving inflated tariffs and construction costs for later Thar coal projects.

–IANS

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