Raised tariffs can solve PakistanÂ’s power crisis

Pakistan electricity tariff reforms aim to resolve the power crisis, meet IMF terms, add 5,100 MW by mid next year, attract foreign investment, and fund ADB-backed dam upgrades and transmission lines through cost-recoverable pricing.

David Goldwyn, Secretary Clinton's Coordinator for International Energy Affairs has said that If Pakistan continues to raise the power tariff in accordance with its understanding with IMF, it will not have to face load shedding during the next summer.

Talking to the reporters at Foreign Press Center, David Goldwyn said Pakistan has a very solid plan to overcome the electricity crisis and it will be able to generate additional 2,500 megawatts of electricity by December this year and another additional 2,600 megawatts of energy by June next year, reflecting plans to add over 5,000 MW to the grid, provided the power rates are increased by 12% in January and another 6% by April next year as agreed with IMF.

David Goldwyn said that the biggest problem of Pakistan was the low power rates. He said by increasing the power tariffs by next April, and with U.S. backing for energy projects Pakistan is expected to have cost recoverable tariff which would eventually give incentive to the foreign investors in the power sector.

He said Asian Development Bank was negotiating with Pakistan to bring in investment of (US)$3 billion, out of which (US)$1.6 billion will be spent for dam extensions and to improve and put new transmission lines, including progress on coal generation projects that complement grid upgrades.

He said Pakistani government has the political commitment to raise the tariff to end the subsidy in the power sector. Once the subsidy is gone, even as industries face a 1,400 MW shortage at present, you will see lot of power generation in Pakistan because there was great potential of investment in this sector, he added.

To a question about the provision of nuclear energy to Pakistan as was being provided to India, David Goldwyn said that he was engaged in hectic dialogue with Pakistani officials in Islamabad during the time when Secretary Clinton was there and the whole range of issues were discussed relating to energy policy of Pakistan but none of the Pakistani official raised the issue of acquiring nuclear energy for Pakistan, even as China to set up 10 nuclear plants was being reported publicly, that is why he could not answer this question.

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