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Russia expresses willingness to invest in energy sector

Russia has shown willingness to invest in the crippling energy sector of Pakistan and has also offered export of 1,000 megawatts of electricity, as the two sides vow to deepen bilateral relations.

Russian Deputy Energy Minister Yury Sentyurin made the offer during a meeting with Planning, Development and Reforms Minister Ahsan Iqbal here on Thursday. Present in the meeting were representatives of leading Russian companies doing business in the areas of energy and construction.

The Russian deputy minister expressed the intention to invest in the energy sector of Pakistan. Moscow is setting up hydropower plants in Kyrgyzstan and is also willing to export electricity to Pakistan via Afghanistan, according to officials of the planning ministry.

Sentyurin said his country could consider increasing the volume to 5,000MW in following years, but it depended on the project’s feasibility.

Except for some seasonal relief, Pakistan is reeling from serious energy shortages that, according to national and international reports, shave 2% off growth every year in addition to increasing unemployment in the country. Heavy reliance on thermal power pushes up the cost of generation, which the government wants to control with a shift to coal and hydroelectric power.

According to planning ministry officials, it was premature to say anything about the Russian offer, as all such projects in the past could not be pushed ahead because of the breakdown of law and order in Afghanistan. Though the planning minister welcomed the Russian proposal, its implementation depended on the geopolitical situation, they added.

Moscow came up with the power export proposal at a time when the Central Asia-South Asia (CASA) 1000 electricity supply project is facing delays, thanks to lack of financing and unstable security conditions in Afghanistan.

Another project, the Turkmenistan-Afghanistan-Pakistan and India (TAPI) gas pipeline has also been delayed by financial and security issues. The Russian minister also offered to lend a helping hand in early completion of the TAPI project.

The minister asked Pakistan authorities to forget about the bitter past when the two countries were pitched against each other during the Cold War.

Echoing the views of the Russian minister, Ahsan Iqbal said bilateral economic and commercial ties were not even 10% of the potential. The new government was trying to eradicate corruption and was taking measures to boost investor confidence, he said.

Iqbal stressed that Pakistan offered huge opportunities for investment in the energy sector, especially in oil and gas. He welcomed Russia’s offer for investment in oil and gas exploration and production and expressed the hope that cooperation between the two sides would help a great deal in coping with energy shortages.

The Russian delegation also expressed interest in supplying liquefied natural gas (LNG) and natural gas to Pakistan, which has been unable to import LNG despite many attempts over the past five years.

Foreign investment is yet another area where Pakistan is experiencing serious problems, caused by bureaucratic hurdles, law and order condition and energy crisis. At the end of last fiscal year in June 2013, foreign direct investment dipped to 13% of gross domestic product, from the peak of 23% in 2007-08.

For this year, the government is targeting to attract $2.4 billion in foreign direct investment.

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