Energy projects worth $ 34.74 bln launched under CPEC

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Energy projects worth $ 34.74 bln launched under CPEC

ISLAMABAD, May 25 (APP): To cope with the severe energy
crisis brewed in 2007, the government from the very beginning,
had given high priority to energy sector and launched many power
projects under China Pakistan Economic Corridor (CPEC)
According to Economic Survey of Pakistan Launched by Finance
Minister here Thursday, the CPEC envisages projects in energy and
infrastructure, with a total financial outlay of around $ 46 billion.
Energy sector projects are estimated to be $ 34.74 billion
while infrastructure projects are estimated to be $ 13.217 billion
that include power generation and transmission projects to be
implemented in IPP mode.
The energy sector wirnessed major developments in its history
since development of the first major power plant development.
The energy crisis brewed in 2007 and was at peak during
2011-2012. Prior to the present government, circular debt, weak
financial position of energy companies, liquidity crunch, falling
gas production, low exploitation of indigenous coal and hydel
resources, high dependence on oil/gas as power generation source
and unutilized power generation capacity were some of the
significant constraints which caused severe energy shortages.
The government has also substantially brought down power
subsidies and has significantly contained the accumulation of
new payable arrears in the power sector by improving Discos
performance, rationalizing tariffs, and reducing delays in
tariff determination.
The subsidy for power sector which were Rs. 464
billion (2.3 percent of GDP) in FY 2012 has been consistently
reduced to Rs. 217 billion (0.7 percent of GDP) in FY 2016.
All this was done while protecting the vulnerable consumer
segments of the country.
Further, Circular Debt Capping Plan is effectively
managing the power sector financial flows, stocks and
subsidy budget.
The National Power Policy 2013 was approved by the CCI
to address the key challenges of the power sector and to
achieve the long-term vision of the power sector.
The policy focused on short term, midterm and long term
objectives to make the power sector sustainable. In short run,
two critical issues were addressed on fast track. One issue was
inefficient recovery system while the other was effective control
of transmission and distribution losses.
Recoveries from end consumers reached 94.40 percent during
July-March FY-2017, being highest in past ten years while transmission
and distribution losses declined to 16.3 percent during the period
under discussion.
In medium term, National Power Policy 2013 had also focused on
reducing the basket price by introducing generation on cheaper fuels.
Altering the fuel mix towards less expensive fuels will lead
to low cost energy.
Investments required for the low cost fuel mix will
necessitate rationalization of the electricity tariff.