Pakistan Economy - News & Updates - Archive

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Aziz admits energy policy was flawed​

NEW YORK, April 5: Former prime minister Shaukat Aziz said that energy consumption in Pakistan had increased rapidly and his government could not foresee the huge demand to be created by the growing economy.

In an interview with Dawn during a visit to New York, he attributed the shortage of electricity in the country to “unprecedented huge energy demands”.

“The demand for fuel is growing rapidly which is reflected in the consumption of electricity, where contrary to estimates of seven to eight per cent the demand grew by as much as 15 per cent,” he said.

“The growth estimates we made were lower than the actual ones, creating a supply demand mismatch coupled with distribution problems and delayed implementation of electricity projects.”

He said his government had approved power projects of over 2,000MW which were under way.

“Fast track projects” of around 400MW had been installed and commissioned to meet unexpected growth and demand.

Commenting on the huge increase in the prices of flour in December, the former premier said the shortages were due to administrative inadequacies and smuggling of wheat to neighbouring countries.

“We are fortunate that wheat prices in Pakistan are lower than the world. However, there is no denying that there is a global pressure on food prices which will push up inflation and make it challenging for the low-income people who have limited income.”

Aziz admits energy policy was flawed -DAWN - Top Stories; April 06, 2008

 

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Country faces 3,000MW shortfall ​

WAPDA to supply 300MW more to KESC​

Tuesday, April 08, 2008

KARACHI: It would be a challenging start for Federal Minister for Water and Power Pervaiz Ashraf as he announced at his first press conference here on Monday that the country was facing a power shortfall of 3,000 megawatts and the government required three years to overcome it.

Speaking to newsmen after chairing a high-level meeting to review the power crisis in Karachi, he blamed the last government for failing to meet power demand, which had reached 10,000MW.

“I take pain in saying that this is the opening balance given to us by the last government,” he said, regretting that not a single megawatt was added to the national grid in the last 10 to 11 years.

The meeting, he said, had decided that the Water and Power Development Authority (WAPDA) would increase power supply to the KESC from 200MW to 500MW in order to give immediate relief to citizens.

This move, he explained, would not completely overcome the shortfall of around 800MW in the city and the utility had committed to adding 400MW in the next six months. The WAPDA would also set up a 140MW rental power plant in Nooriabad, specifically for Karachi, he added.

Asked about the steps he intended to take for promoting energy conservation, he ruled out any forced closure of shops and markets but said people would have to adopt all such measures voluntarily which could help save power.

The announcement to increase power supply to the KESC, the country’s only privatised utility, comes days after the WAPDA signed a deal to set up a power plant in the public sector, only the second in the past 17 years.

Managing Director Pakistan Electric Power Company (PEPCO), Munawar Baseer, told The News taking power generation to the public sector was not a policy shift but rather an outcome of the slow progress of independent power producers (IPPs).

However, according to another PEPCO official, the decision was based more on economic feasibility as could be seen from 525MW Chichoki Mallian power project, which was signed earlier this month.

“Chichoki Mallian project will cost us $355 million whereas private investors have put the cost at more than $600 million,” he said. Most importantly, the tariff of this gas-fuel configured power plant was just 5.35 cents per unit, he added. In January this year, the government signed an agreement for setting up 450MW Nandipur power plant, which was the first project in the public sector in the past 17 years.

Country faces 3,000MW shortfall

 

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KESC stops load-shedding in industrial areas ​

Tuesday, April 08, 2008

KARACHI: The KESC sent a letter to industrial associations of Karachi on Monday, stating that it would stop load-shedding in industrial areas and thus, there would be no power breakdowns in future, said Nisar Shekhani, Chairman SITE Association of Trade and Industry.

This was stated in a high-level meeting, held in Karachi in which Raja Pervez Ashraf, Federal Minster for Water and Power also announced supply of 300MW additional power to Karachi Electric Supply Corporation (KESC) from Pepco.

The announcement of KESC to stop power outage was highly appreciated by industrialists. Earlier, it was announced that there would be daily load shedding of 4 hours, from 7pm to 11pm, along with unannounced load shedding of another 2 hours. However, this should not be repeated after the commendable announcement of KESC to abolish load shedding in the industrial areas of Karachi, Shekhani informed.

He added that the announcements of Raja Pervez Ashraf to provide 300MW additional power to Karachi, and KESC to cease load shedding in the industrial areas would help industries regain their full productivity, which they desperately need to overcome the production loss they have faced in the last couple of months.

Noor Ahmed Khan, Chairman North Karachi Association of Trade and Industry welcomed the announcement of 300MW more power to Karachi and hoped that this would help limit the problems of industrialists. This, however, will not solve the “industrial power problems altogether, as this must be increased up to 3 times,” he added.

Muhammad Idrees Gigi, Chairman FB Area of Trade and Industry appreciated the Federal Minister’s announcement, but said the problem is that KESC does not know what the total electricity consumption of Karachi is, and what is required. However, he noted that the government’s announcement to invest in the power sector is a constructive step and has also been taken to produce power through wind energy in two to three years.“The power consumption in Karachi is expanding on a daily basis, which is evident from the daily household item sales in the city. We wish the government luck in its efforts to invest in power generation, which is extremely important, especially when our power consumption is surging. Uninterrupted power supply is a pre-requisite of industrial production. The cost of production is also increasing as our machine components are affected by regular power break downs. Some times we need to import machine components, and this interrupts the whole production process for days,” he said. 60 per cent of our industries have stand-by generators; the rest of the 40 per cent would breathe a sigh of relief with this 300MW increment to KESC, Gigi added.

KESC stops load-shedding in industrial areas

 

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Engineering exports to hit $1bn in 2 years ​

Tuesday, April 08, 2008

LAHORE: Engineering Development Board (EDB) Chief Executive Officer Almas Hyder has said Pakistan’s engineering industry is now progressing by leaps and bounds.

“Our electric fan exports, which were zero about five years ago, have now reached $50 million. The engineering sector exports touched $850 million and are expected to hit $1 billion during the next two years,” he said.

Talking to reporters at a pre-departure training workshop on effective participation in Hanover trade fair, he said that the engineering sector constituted 55 per cent of the world trade, but the country had a negligible share in the world market.

“The engineering sector is very vast and its exports have become vital for us to get out of the trade deficit. We should reduce our export reliance on the textile sector,” he said. He said Pakistan Steel Mills had now started consumption of local raw material from Chagi and the EDB is well aware of the rising demand for steel and taking appropriate measures in this regard.

Earlier speakers said that because of continuous participation in the Hanover trade fairs, Pakistani industry people learned how to improve the quality of products, presentable packaging, and pricing of products, which considerably raise the standard of our exportable goods. The exports were 300-400 million dollars about three-four years back and as a result, the exports have been increased to $850 million.

Out of 14,000, Gujranwala with 9,000 engineering industrial units has strong base for producing of engineering goods, they said. They stressed the need for collaboration with the institutions concerned for improving technical skills and capacity building of the workforce. They said that out of the total cost of Rs900,000, the EDB was providing Rs850,000 to each of 55 exhibitors, while every one has to bear the cost of only Rs50,000 for attending the trade fair.

Hyder urged the participants to take care of the public money being provided to them for the trade fair so that desired results could be achieved.

Engineering exports to hit $1bn in 2 years

 

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India mulls more cement imports from Pakistan ​

Tuesday, April 08, 2008

NEW DELHI: India will look at importing more cement from Pakistan to check spiraling domestic prices, as a neighbouring country has surplus production this year, a top official in the Industry Ministry said.

“We are looking at importing more cement from Pakistan through north western border,” Ajay Shankar, secretary in the Department of Industrial Policy & Promotion, said. “We are watching the situation very carefully,” Shankar said, referring to internal monitoring of some commodity prices to act if their prices go out of control.

“Capacity expansion is taking place and we expect demand-supply situation to balance this year,” he said, referring to the plan to enhance cement capacity by 118 million tonnes over the next four years to touch 298 million tonnes.

State-run canalising agency Minerals & Metals Trading Corp could be asked to import cement from Pakistan at around Rs210-Rs220 per 50-kg bag, against the domestic price of over Rs230.

India mulls more cement imports from Pakistan

 

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Computer industry wants GST withdrawn​

ISLAMABAD, April 7: PC (personal computer) and server market in Pakistan declined to 9.6 per cent in 2007 from the 16.4pc recorded a year ago.

The slowdown is a matter of grave concern not only for the computer industry but also for overall growth of the country because information technology is the backbone of all formal and informal sectors of economy, said Pakistan Computer Association president Munawar Iqbal at the executive body meeting of the association. He called it a grim situation.Quoting a research report, he said the decline was because of the highly unsteady political situation during 2007. Another reason for this slowdown was imposition of 15 per cent General Sales Tax on IT goods and imports.

The PCA president said the association had drawn the attention of the previous government towards the impact of 15pc GST on computers and its components.

“The issue was raised with the then prime minister, the then IT minister and the then state finance minister, but to no avail.”

Despite assurances to provide immediate relief, nothing tangible was done to resolve the issue, he said, and added that even the Senate and the previous National Assembly had taken notice of the matter.

He said that according to latest reports published by international researchers during 2006-07, total import of PCs and servers in the country was 630,000 units, which dropped to 149,000 at the end of 2007, a decline of 40pc.

Mr Munawar Iqbal further stated that there not been imports under vigorous expansion, autonomous strengthening of infrastructure and technological upgradation programmes by the banking, financial, telecommunication and education sectors, and with the introduction of e-government, these figures would have been more depressing.

While giving a comparative analysis of the region, he said that other countries have granted a host of tariff and non-tariff concessions to this industry.

Pakistan, he said, has a 1.5pc computer density, whereas in the neighbouring countries, it was much higher. Computer density, he said, plays an important role in economic development of the country, and the government should pay special attention to this sector.

The PCA executive body also appealed to the government to abolish 15 per cent GST on import of computers and computer accessories to provide an immediate relief to common users and students.

Computer industry wants GST withdrawn -DAWN - Business; April 08, 2008

 

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PNSC to acquire new vessels​

KARACHI: Pakistan National Shipping Corporation (PNSC) has planned acquiring new double-hull vessels or oil tankers worth $135 million by end 2010, official sources told Daily Times.

Official sources in the PNSC told that the state-run shipping company, in this regard, would borrow commercial loan without any government security or guarantee from ABN Amro bank.

PNSC needs to acquire new vessels till 2010 as per International Marie Time Organisation (IMO) rule as all single-hulled ships will have to stop sailing by 2010, which may leave the industry short of tankers. It is also expected due to the short of tankers IMO might give another two-year relaxation. The main reason to abandon single hull ship is to reduce the risk of pollution if a ship is damaged in an accident, it is learnt.

The space in between the two hull layers is often used as storage tanks for fuel or ballast water. Double hulls are more extensive safety measure than double bottoms, which have two hull layers only in the bottom of the ship and not the sides.. In case of grounding or other underwater damage, most of the time the damage is limited to flooding the bottom compartment, and the main occupied areas of the ship remain intact. In case of collision with another ship, most of the time the damage is limited to flooding the side compartment, and the main occupied compartments also remain intact.

In 1979 PNSC had 41 ships in its fleet with a cumulative weight of 310 thousands dead weight tonnage and now in 2008 they have only 14 ships weighing 346 thousand dead weight tonnage.

Latest vessels acquired by PNSC are an oil tanker, which was built 1986, and the PNSC bought it in 2006. Officials told that PNSC is facing problems due to the long and complex procedure of approvals. Due to this the private companies take advantage on PNSC, sources added.

Pakistan has only three vessels despite many seaports, causing loss of business in the shipping sector, On the other hand, he added, India has 500 vessels.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan wants UK aid to develop Tribal Areas: PM​

* Yousaf Raza Gillani says govt to follow multi-pronged strategy to address terrorism
* UK Home secretary announces increase in development funding for Pakistan

ISLAMABAD: Pakistan will welcome British assistance in the development of the Tribal Areas, Prime Minister Yousaf Raza Gillani said on Monday.

Talking to visiting British Home Secretary Jacqui Smith at Prime Minister’s House, he said the new democratic government would focus on improving the socio-economic conditions, reducing poverty and generating job opportunities for the people living along the border with Afghanistan.

During his talk, according to a statement from Prime Minister’s House, Gillani underlined the need to regulate madrassas to equip them to provide modern education, which would enable the youth of the area to contribute towards the economic uplift of the region.

Multi-pronged: The prime minister told Smith that the government would follow a “multi-pronged” strategy to address terrorism and extremism. He said terrorism was a worldwide threat and the global community should focus on its root-causes of economic disparity and unresolved political issues.

Gillani stressed the need to expand Pak-UK relations in all areas to boost existing economic and trade relations.

Smith told the premier that she appreciated Pakistan’s role in curtailing terrorism and extremism, adding that the UK government would provide full support to the new government and for an early return of Pakistan to the Commonwealth.

Also on Monday, Smith said that the terrorists and extremists posing a threat to Britain had connections to violent extremist groups in Pakistan. Addressing the opening ceremony of an exhibition of Islamic calligraphy at the National Art Gallery, she said dialogue and co-operation between the security agencies of Pakistan and Britain was vital to effectively handle the terrorism threat.

Increase: The UK Home secretary also announced an increase of British assistance to Pakistan: “Through our Department For International Development (DFID), the UK is doubling its spending in Pakistan to 480 million pounds for the period of 2008 to 2011.”

She said that some of the DFID funding was earmarked for development programmes in the Tribal Areas, Reuters reported.

Daily Times - Leading News Resource of Pakistan

 

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Government hints at reviewing policy on capital earnings ​

ISLAMABAD (April 08 2008): The government on Monday dropped the strongest of hints so far that it might end tax immunity on capital earnings through stock exchanges from next fiscal year. Finance Minister Ishaq Dar told a Senate standing committee that continuing with exemptions would not be possible any more.

FINANCE MINISTER ISHAQ DAR TOLD A SENATE STANDING COMMITTEE THAT CONTINUING WITH EXEMPTIONS WOULD NOT BE POSSIBLE ANY MORE: He, however, took a cautious stance and did not outrightly say that the government had firm plans to impose capital gain tax (CGT). "We need to collect more revenue...we will have to broaden the tax base by bringing more sectors into the net," he said.

There has, of late, been a lot of criticism on the policy of previous regimes exempting rich stock brokers from paying tax on what they earn through trading in the capital markets. The exemption on capital gain is applicable on stock exchanges for the last many years.

Ishaq said the government wanted to raise, by at least four to five percent, the ratio of tax collection to Gross National Product (GDP) over the next couple of year.

Revenue collection is about 9 percent of GDP at the moment, and officials are eyeing to double it in a decade. Experts believe that it would not be possible without taxing the stock exchanges earnings and agriculture sector, another exempted area. Members of the committee suggested that CGT must come into force immediately. It, however, formed a three-member subcommittee to hold negotiations with stock brokers before giving its final recommendations to the government over the issue.

Representatives of Karachi and Islamabad stock exchanges contested the proposal, arguing that it would suffocate the inflow of both direct and portfolio investment. They sought exemption for another five years with additional demand to do away with overlapping taxation.

ECONOMY IN A SHAMBLES: Dar told the committee that the economy was under immense pressure due to previous government's policy of giving subsidies on various products and utilities. The worse part, he said, was that these subsidies were announced but were either not paid at all or paid partially, making it difficult for the new government to strike a balance now.

"What has been given to us is almost a crashed economy...we have to rebuild it now," he told the committee. Abrupt rise in oil prices further aggravated the economic situation, he added.

CONVENTIONAL MODEL: The minister said that the government was planning to focus more on agriculture sector, instead of services, giving the idea that the new regime would follow a conventional economic model.

Experts believe it is more a compulsion than a desire because of the non-availability of power and other essentials to take an aggressive stance. "It's going to be like a fresh start by the primitive sector historically," one of them opined, referring to agriculture.

http://www.brecorder.com/index.php?id=720371&currPageNo=1&query=&search=&term=&supDate=

 

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KESC to get 500 megawatts additional power from Pepco ​

KARACHI (April 08 2008): The Government has announced to establish new power generating plants in Karachi of 540 MW capacity in next six months besides increasing the Supply from Pakistan Electric Power Company (Pepco) to the city up to 500 MW.

Federal Minister for Water and Power, Raja Pervez Ashraf announced this while addressing a press briefing after a high-level meeting held here on Monday to discuss the power crisis in Karachi.

Minister for Privatisation and Investment, Syed Naved Qamar; Ambassador at large Salman Farooqui; Federal Secretaries for Water and Power; Finance and Privatisation, Chief Secretary Sindh; Chairmen Wapda, Pepco and Nepra; representatives of National Industries Kuwait and Al-Jomaih Saudi Arabia and other stakeholders also attended the meeting.

Ashraf said that the KESC has been asked to establish a rental power plant of 400 MW capacity in next six months. While the Pepco would also establish a rental plant of 140 MW in Nooriabad area, besides increasing its supply to the city up to 500 MW.

The Minister also announced to constitute three committees over different power related issues including a high-powered two-member committee comprising himself and Syed Naved Qamar to oversee the matters of the KESC and its post-privatisation progress.

However, he dispelled the impression that the government is going to nationalise the KESC saying that the company has depicted a responsible behaviour in overcoming the difficulties of Karachiites.

One of the other two committees, he added, headed by the Chairman Wapda would submit its report within 10 days over the disputed matters between the KESC and Pepco. While, the other would be responsible to make sure the implementation of all the decisions taken by the meeting and would be chaired by the Federal Secretary for Water and Power, he maintained.

Ashraf said that the meeting reviewed the power situation of the city in detail and various measures have been decided unanimously to overcome the energy crisis of the metropolis.

The Minister also appealed the nation to conserve the energy and claimed that the power load shedding would completely be ended in the country after three years by the government's, what he claimed, revolutionary steps.

He was of the view that the closure of markets before 8 pm is necessary for the load management and the energy conservation but maintained that the nation should adopt such measures voluntarily.

Ashraf said that only the consumers of Karachi could save nearly 200 MW by taking conservatory measures. The Minister hinted at launching a media campaign for creating awareness among the masses regarding energy conservation. The minister vowed to work with full commitment and dignity and said that no hindrances in the interests of common people would be tolerated.

He maintained that the country is facing a shortfall of about 3,000 MW as compared to the demand that lies around 10,000 MW. He said that the situation demanded war-footing steps to overcome the crisis.

He charged the past regime of not taking necessary measures for setting up new power plants in view of increasing power demands of the country and said that not even a single MW has been added in power generation during last eight years.

Nasir Al Maani, owner of the National Industries Group Kuwait, the largest shareholder of KESC, said that more time is needed to develop the KESC. He said that his group would make further investment in KESC in coming years adding that the situation would improve in this summer while the load shedding would completely be ended in next summer.

Business Recorder [Pakistan's First Financial Daily]

 

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SNGPL presents five-year investment plan ​

ISLAMABAD (April 08 2008): The Sui Northern Gas Pipeline (SNGPL) management on Monday submitted a Rs 30 billion 5-year investment plan to the Minister for Petroleum, Muhammad Asif, here for expansion and improvement of its gas distribution network.

Sources told Business Recorder that Managing Director Rashid Lone gave a detailed presentation to the Minister on SNGPL technical and financial health, besides apprising him of the 5-year investment plan. He informed the Minister that SNGPL would generate funds, to make its investment plan a reality, from indigenous resources.

He said the plan has been prepared keeping in mind the infrastructure requirements for the growing gas demand in SNGPL coverage area. He said SNGPL was making annual profit of Rs 8 to 9 billion and, after paying taxes to the government and dividend to the shareholders, it could spare the required funds for development and expansion of its network.

SNGPL is responsible to supply gas to Punjab, NWFP and Azad Kashmir, and the Sui Southern Gas Company (SSGC) to the remaining two provinces-Sindh and Balochistan. Since SNGPL area for gas supply is comparatively larger it gets more than half of total gas available for the consumers.

Rashid told the Minister that SNGPL was a profit-making entity and it invested over $500 million during last five years to enhance efficiency and expand its distribution network, besides paying substantial revenue as gas development surcharge (GDS) to the government. He said that SNGPL gas consumers were increasing on regular basis and just in past five year it added one million new households and 2000 industrial consumers in its system.

Asif appreciated SNGPL role and, in particular, its management's attitude to rely on its indigenous resources to keep on expanding the network to meet the growing demand of gas in its jurisdiction. He assured the SGNPL management all-out support on behalf of the Ministry for betterment of its system and improving quality of service to its consumers.

SNGPL's presentation was part of sensitisation programme to apprise the Minister about the ministry and its departments' working. Earlier, PSO and a few other attached departments had apprised the minister of their working, liabilities, technical and financial position besides their role in revenue generation and giving services to the people in different areas. SSGC, OGDC and other public sector exploration and production companies are yet to present their cases to the minister.

Business Recorder [Pakistan's First Financial Daily]

 

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Saudi Arabia to give Rs 4.2 billion loan for Rawalakot projects ​

ISLAMABAD (April 08 2008): Saudi Arabia will provide a loan of Rs 4.2 billion to Pakistan for different development projects to be implemented under Rawalakot City Development Project (RCDP), to reconstruct the city infrastructure in public and private sectors, which was damaged by 2005 devastating earthquake.

The Earthquake Rehabilitation and Reconstruction Authority (Erra) has submitted a detailed programme in this regard to the Planning and Development (P&D) Division, sources told Business Recorder on Monday. Sources said the total cost of the project is Rs 8.4 billion with the government contribution of Rs 4.2 billion. The government allocation will be funded from Erra's allocation of Rs 35 billion for the current fiscal year.

This will be a mega project with a number of sub-projects in health, education, sanitation, sewerage, road infrastructure areas. The sources said that Erra has prepared umbrella PC-I of the project.

The government has already approved different projects for Azad Jammu and Kashmir, which include Muzaffarabad City Development Project costing Rs 21 billion, Balakot City Development Project of Rs 12 billion,. etc and Bagh City Development Project costing Rs 7.31 billion. These projects are also being implemented from Erra's this year budget.

According to Erra's assessment, Rawalakot district has suffered a significant loss due to the October 2005 earthquake. Around 83 percent of the private houses were fully damaged. The damage to the education sector is 95 percent as 923 schools were damaged in both public and private sectors.

About 213 health facilities were fully or partially damaged. The direct and the indirect losses to agriculture have been estimated at Rs 8.49 billion and Rs 4.22 billion respectively. The road infrastructure, 45.4-km metalled and 507-km of link roads with four bridges were damaged.

The National Engineering Service Pakistan (Nespak), according to the sources, had undertaken a master plan and it had suggested 33 projects involving roads, bridges, government buildings and urban settlements, etc Nespak had proposed the cost of all the projects at Rs 7.31 billion.

According to Erra, the 1,120 persons died whereas 1,883 persons were injured in the earthquake. A total of Rs 873.115 million has been paid as compensation for death and injury cases in Rawalakot district till March 2007. According to some analysts, Erra has a lot of funds, but the Authority is said to have problems with the utilisation.

The execution of some of the important projects has not been up to mark in most of the cases. Erra is all in all in projects' execution, and it has no assistance from other divisions and departments. This very issue, sometimes, creates a lot of hardships in implementing the projects as the Authority is always short of skilled workforce.

Business Recorder [Pakistan's First Financial Daily]

 

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1,500 shortlisted for jobs in South Korea ​

KARACHI (April 08 2008): A South Korean delegation has finalised the list of 1,500 successful candidates, of them 100 will be flying to Korea by the end of May 2008. Officials in Overseas Employment Corporation told Business Recorder on Monday that the corporation has completed the documentation of successful candidates and sent to Korea, hoping that around 100 candidates would be offered Korean visa in first phase.

They said that out of total 2,000 applicants, 1,500 passed the Korean language test. Around 400 candidates were enrolled at Karachi office and the rest from all over the country.

They said that Korea was immensely looking for manpower for its industries. The annual labour requirement of Korea was about 3,000 and the majority workforce is being inducted from pacific. Officials hoped that Korea would recruit more than 4,000 skilled and unskilled workers from Pakistan.

The high-ups of Pakistan and Korea had signed an agreement envisaging the former to provide skilled and unskilled manpower to the latter for its industrial needs. Korea would provide.

Business Recorder [Pakistan's First Financial Daily]

 

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Two thermal power stations of 700 megawatts for Faisalabad planned ​

FAISALABAD (April 08 2008): Two new thermal power stations of 700 megawatts are being constructed here to cope with the shortage of electricity, said sources in Water and Power Development Authority (Wapda).

Sources stated that construction of a 200 megawatt thermal power station at Satiana would start next month, while the construction of 500-megawatt thermal power station on Canal Road near old thermal power station would also be initiated before the end of this financial year.

According to the Wapda sources, the Satiana Road thermal power station, having generation capacity of 200 megawatts, would be accomplished within 165 days in the private sector.

The Canal Road thermal power station of 500-megawatt capacity would three turbines and it would be completed in three phases. Two turbines of this plant would be completed in the first phase, while the third would operate with help of exhaust of the first two turbines.

Official sources expressed the hope that these new thermal power plants would start generating electricity within the next three years, under the "fast track programme."

Business Recorder [Pakistan's First Financial Daily]

 

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Creative Energy Resources acquires a strategic stake in Gas fired Power plant in Pakistan​

Creative Energy Resources Corporation today announced that it has bought a strategic stake in the 586 MW Uch power plant in Pakistan from an affiliate of GE Energy Financial Services Financial details of the transaction were not disclosed.

CER is a regional power company owned by Swicorp Joussour Company (Saudi Arabia) that will build, acquire, own and operate power generation, transmission and distribution facilities in the Middle East, North Africa, and South Asia (MENASA) region.

The generation projects will be based on conventional, thermal, as well as renewable energy. CER intends to partner with key players in the region to develop these facilities and today's announcement is in line with this strategy.

The Uch Power Limited (UPL) plant is a 586MW combined cycle thermal power plant that generates electricity, using low British Thermal Unit (BTU) gas from the indigenous Uch gas field, which is supplied under a long-term agreement by the Oil and Gas Development Corporation, majority owned by the Government of Pakistan.

The plant's output is sold to WAPDA, the national utility owned by the Government of Pakistan, under a long-term contract. The plant is the lowest cost source of thermal power generation in Pakistan.

UPL is well placed to leverage the plentiful reserves of the Uch gas field by converting the low BTU gas into electricity at the plant.

Generation of power using clean fuel presents a compelling opportunity for CER, in a country where rapidly increasing demand for power has led to severe shortfalls of supply.

Shahid Khan, Investment Director, Swicorp Joussour Company said:
'Power is an important asset class for our investors, and we are pleased with the addition of Uch power to the CER power platform. We are confident that the Uch investment offers our investors access to high quality, risk-adjusted returns. We look forward to continuing to work with the CER management team to develop and acquire further power related projects in the MENASA region where the growing economies and population levels have led to acute shortages of power that we hope to address'.

Commenting on the announcement, Shahzad Qasim, Founder and CEO of CER stated: 'The closing of this transaction is an important milestone for CER. We are excited about expanding the generation capacity at Uch to help meet the growing power demand in the country. We are pleased to partner with International Power plc, Hawkins International, Inc. and Hasan Associates and look forward to developing a fruitful relationship going forward. We would like to express our gratitude for the trust and confidence the Government of Pakistan and other stakeholders in the plant have placed in CER.

The Swicorp Joussour Company is a private equity vehicle that is structured as a Saudi Joint Stock Company, and is focused on petrochemicals, energy-intensive industries, gas & oil, and infrastructure investments in the MENASA region.

The company is managed by Swicorp, a diversified financial services firm operating through an extensive network of offices in the Middle East and North Africa.

Founded in 1987 and licensed by the Capital Market Authority of the Kingdom of Saudi Arabia, Swicorp has an extensive track record of pioneering transactions across the MENA region over the last 20 years.

Swicorp's offices in Riyadh, Jeddah, Tunis, Dubai and Algiers provide in-depth local knowledge, plus its Geneva presence (offering financial advisory services) and proximity to major European financial centers provides access to international corporations and leading edge expertise.

Creative Energy Resources acquires a strategic stake in Gas fired Power plant in Pakistan | Swicorp