PAKISTAN NEEDS NEW ENERGY

US considers funding Pakistan energy projects
Adam Entous (w/Sugita Katyal and Alex Richardson), August 17, 2009 (Reuters via Forbes)

"President Barack Obama's special envoy said…the United States was considering funding projects to upgrade Pakistan's antiquated power sector, but played down the speed at which assistance would materialise and crippling electricity shortages would end.

"Pakistan's finance minister, Shaukat Tarin, said the government would rent electricity-generating plants over the next three to five years to fill the gap until large-scale energy projects come online…[and] said Washington could help by providing financial guarantees to encourage private investment…Obama's envoy to Pakistan and Afghanistan, Richard Holbrooke, offered few details about the kinds of projects Washington would sponsor…"

Pakistan has pockets of great wind. (click to enlarge)

"Power shortages have [been worsening for 25 years and have] devastated the country's economy and undercut support for its government, a critical ally in Washington's war against the Taliban in neighbouring Afghanistan…U.S. trade promotion agencies such as the Overseas Private Investment Corporation and the Export-Import Bank could provide financial backing for some of the long-term projects, but doing so would require U.S. congressional authorisation.

"Holbrooke has said that recent gains by the Pakistani army against militants gave Washington "breathing room" to focus more attention on Pakistan's economic woes, chief among them the shortage of electricity…After meeting Pakistan's foreign minister… Holbrooke declared the energy sector, rather than security, his "primary focus"…The public shift in emphasis appeared aimed at boosting the standing of both Pakistan's elected leaders and the United States in a country deeply sceptical of their growing military alliance against militants…"

Pakistan has lots of sun. (click to enlarge)

"Mary Beth Goodman, Holbrooke's economic adviser, said the energy shortfalls were not only affecting the border areas but the entire country…Pakistani cities sometimes suffer outages of up to 20 hours a day. Key industries have been shuttered, sending unemployment soaring…[As a temporary quick fix] rental power plants would be used to generate up to 3,500 megawatts of electricity… Pakistan [will] not need U.S. cash assistance to run the temporary plants…

"…[The longer term goal is] to replace the rentals after three to five years with permanent, long-term hydro-electric, coal, wind and solar plants…Pakistan's current reliance on costly gas-fired plants [was described by one government official as] "totally screwed up" and financially unsustainable…"