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World Bank plans to help Pakistan import electricity

ISLAMABAD — The World Bank has offered financial and technical support to help import of 4,000MW of cheap electricity from central Asia states besides working domestic sources in order to overcome electricity shortage owing to a 43 per cent expected increase in demand to 20,000 MW by 2010.

The World Bank estimates that Pakistan's peak demand now exceeds 14,000MW and the present installed capacity of 19,500MW has become inadequate on account of the wide variations in the water availability which greatly reduces the firm capacity available. " Electricity demand at the generation level is forecast to grow at 7-8 per cent per year to about 20,000 MW by fiscal year 2010 and 44,700 MW by 2020", a government official said quoting fresh World Bank estimates.

The country that had a comfortable supply position during the last several years has already started experiencing shortages during peak periods and "it is anticipated that if no new capacity is added, firm power shortage would amount to 5,500MW by fiscal year 2010". The World Bank understanding that besides improving supply efficiency, demand management, addition of new hydro and thermal power stations, Pakistan should expedite importing 1000 MW from Tajikistan and Kyrgyz Republic in the first phase and then increase such imports to 4,000 MW in the second phase.

These imports, the World Bank believes, have two major advantages. First, the cost of supply from Sangtuda, Rogun, Talimardjan and Kambarata power stations in the CARs would range between 2.26 cents to 3.75 cents per unit compared with existing average generation cost in Pakistan at 5.6 cents per unit. Pakistan is now entering into contracts with independent power producers (IPPS) for thermal power generation at a tariff as high as 14 cents per unit.

Second, the attractive feature of the imports form CARs is that Pakistan's peak demand occurs in summer, when the central Asian power systems have large surpluses from their hydroelectric generation stations.

The Bank says that international financial institutions like Asian Development Bank, Islamic Development Bank and USAID and private sector companies like AES Corporation of USA and RAO UES of Russian have already indicated to be part of the project once feasibility studies currently underway are completed. According to government of Pakistan estimates, the country is most likely to face a major energy crisis in natural gas, power and oil in the next three to four years that could choke the economic growth for many years to come.

Pakistan's total energy requirement would increase by about 48 per cent to 80 million tonnes of oil equivalent (MTOE) in 2010 from about 54 MTOE currently, but major initiatives of meeting this gap are far from turning into reality.