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US attaches highest priority to assist Pakistan’s energy sector

The United States strategic interests are inextricably linked with a stable Pakistan and supporting its energy sector remains Washington’s highest priority in the new fiscal year for power generation, according to a new Congressional Research Service Report here Wednesday.

The report on US assistance for Pakistan says perhaps the most pressing problem facing the new Pakistani government of Prime Minister Nawaz Sharif, seated in June 2013, is the country’s energy sector and particularly notes that Washington has requested $ 265 million to aid the country’s energy sector development in the new fiscal year.

According to the State Department’s FY2014 Congressional Budget Justification, assistance to Pakistan’s energy sector is the “highest priority,” and the Administration’s request for $265 million in FY2014 funding for this effort accounts for more than one-third of all civilian aid requested for the coming fiscal year,” the report said.

“The goal is to support the Pakistani government in “developing a policy environment that will attract private sector investment and increase cost recovery, decrease technical and commercial losses, and add megawatts to the grid through visible generation projects.”

By the end of 2013, AID expects to have added fully 900 MW to Pakistan’s power grid, enough to power some two million homes and businesses. An added 300 MW is planned by the end of 2014. The great majority of this added capacity will come from improvements of the Muzafargarh and Jamshoro power stations (serving the cities of Multan and Hyderabad, respectively), as well as modernization of the Tarbela Dam near Islamabad.

There is a particular focus on boosting Pakistan’s hydropower potential by funding projects to improve capacity at five dams (Mangla, Kurram Tangi, Gomal Zam, Satpara, and Tarbela). The Tarbela Dam is one of the world’s largest and supplies fully 16% of the country’s electricity. In March 2013, a project to restore three of the dam’s generators was completed, adding 128 megawatts to the national power grid.

The United States had provided the $16.5 million needed for the repairs. In mid-2012, Congress released $280 million in new assistance for Pakistan’s energy sector; these funds will support projects at Mangla and Kurram Tangi.15

The report though recounts that the overall US Administration request for Pakistan assistance the fiscal year is $ 1.2 billion compared with $ 1.9 billion in the outgoing fiscal year. The US assistance is covered under Kerry-Lugar-Berman aid bill and varies from one financial year to the other in actual allocation.

But, the report highlights that experts commonly list Pakistan among the most strategically important countries for US policy makers.

The 113th Congress in Washington is grappling with US-Pakistani relations, as well as the “need to balance Pakistan’s importance to US national security interests with US domestic budgetary pressures,” it said.

“In the post-9/11 period, assisting in the creation of a more stable, democratic, and prosperous Pakistan actively combating religious militancy has been a central US foreign policy effort. Global and South Asian regional terrorism, and a nearly 12-year-long effort to stabilize neighboring Afghanistan, are viewed as top-tier concerns.”

The report also mentions some attempts by members to restrict aid to Pakistan but underscores US interests in maintaining relations with Pakistan.

“Nevertheless, many US government and independent analysts continue to assert that US strategic interests are inextricably linked with a stable Pakistan that can effectively rule all of its territory, assist the United States with efforts to stabilize Afghanistan, as well as with the fight against terrorism, and contribute to the stability in the region.”

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