Investment may not solve Pakistan’s electricity woes

Subject

Electricity shortages in Pakistan.

Significance

Pakistan’s electricity generating capacity has risen to 19.2 gigawatts from 12.0 gigawatts in 2012. Despite this, shortfalls affect ordinary consumers and businesses alike. High temperatures this summer simultaneously increased demand for power and reduced hydroelectric output.

Impacts

• Diversification into coal and renewables will strengthen Pakistan’s overall resilience to external shocks.
• The lack of financial credibility within the electricity sector is likely to affect investor sentiment.
• Chinese companies may be willing to assume risk in pursuit of wider political and economic advantages for Beijing.