PTBP Web Desk
Pakistan’s power sector, the Minister for Power, Sardar Awais Khan Leghari, has reached out to international development partners to facilitate the privatization of the country’s Distribution Companies (Discos). This initiative was discussed during a meeting with a delegation from the Asian Development Bank (ADB), headed by Country Director Xiaoqin (Emma) Fan, which took place in the capital on Wednesday.
The meeting focused on deepening cooperation in the energy sector. Leghari appreciated the ADB’s longstanding commitment to Pakistan’s energy infrastructure, particularly in areas like transmission. He highlighted the government’s plan to reform the power sector, which includes:
Policy Guidance: The formation of a specialized team at the newly established Power Planning and Monitoring Company (PPMC), which has taken over from the now-defunct PEPCO. This team will offer strategic policy guidance to the Power Division, aiming for better governance and operational efficiency.
Privatization of Discos: Leghari specifically requested ADB’s investment to enhance the operational capabilities of the Discos, preparing them for a smoother transition to private management.
Emma Fan, the ADB’s Country Director, underscored the bank’s focus on the energy sector, which forms a significant portion of ADB’s investment portfolio in Pakistan. She emphasized:
ADB’s interest in projects that would not only modernize but also make the energy sector more sustainable, addressing both environmental concerns and efficiency.
Broad Impact: Fan elaborated on ADB’s ongoing projects aimed at improving private sector development, tackling climate change, and enhancing governance within the energy sector, which are crucial for economic and social advancements in Pakistan.
The dialogue also touched upon the complexities involved in the privatization process Financial Strengthening: The Power Division has been collaborating with the World Bank to ensure the financial robustness of the Discos before privatization. This preparation is vital to attract competent private sector players who can manage and expand these entities effectively.
Negotiations with IPPs: An insider revealed that current negotiations with Independent Power Producers (IPPs) might pose challenges to the privatization timeline. The top management of IPPs has communicated concerns to the Task Force, indicating potential delays or modifications in the privatization strategy.
The involvement of international financial institutions like the ADB is pivotal not just for funding but also for bringing in expertise and modern management practices: Capacity Building: Assistance from ADB will help in deploying the right personnel at PPMC, ensuring that the policy advice and strategic direction are on par with international standards.
Investment in Infrastructure: Investments are expected to focus on upgrading infrastructure, which is crucial for reducing losses, improving service delivery, and making the Discos more attractive for privatization.
The Power Division’s official statement post-meeting highlighted the ongoing and future cooperation with ADB: Continuity in Partnership: Both parties expressed commitment to continuing and expanding their cooperation on energy sector projects, emphasizing the mutual benefits of such collaborations.
Economic and Social Impact: The minister stressed that a robust power sector is vital for economic development and enhancing the quality of life for Pakistani citizens. This vision aligns with ADB’s goals of promoting inclusive economic growth through sustainable energy solutions.
