ISLAMABAD: An international financial institution has said in a recent report Pakistan heavily relies on energy imports since it is not investing enough money in carrying out exploration and development work to help meet the burgeoning domestic demand.
The Asian Development Bank (ADB) released a comprehensive energy forecast of individual countries, including Pakistan, which are part of the Central Asia Regional Economic Cooperation (CAREC) program on Saturday to help facilitate sustainable energy infrastructure investment.
According to the bank, “CAREC Energy Outlook 2030” seeks to “equip investors and policy makers with insight on regional trends to help identify potential investment opportunities that will improve energy services and reduce carbon emissions” across the region.
“Pakistan’s domestic energy production consists of oil, natural gas, and coal,” it said in an elaborate chapter on the South Asian state. “However, insufficient investment in exploration and development activities has made the country rely heavily on imports— nearly 40 percent of its total primary energy supply is imported.”
The report pointed out Pakistan’s energy requirements had substantially increased from the past and was likely to follow the same trajectory in the foreseeable future.
“Final energy demand in Pakistan was about 96 million tons of oil equivalent (toe) in 2018, and is projected to reach 108–126 million toe in 2030,” it noted.
The document said that natural gas was expected to increase its share in the total energy supply, while reliance on biomass was likely to decrease in the coming years, leading to a cleaner future for residential consumers.
The ADB emphasized greater development of the transmission and distribution (T&D) network, adding that 25 percent of the country’s population was not grid-connected and had no access to the electricity network.
The bank also maintained Pakistan’s energy sector presented “significant investment opportunities” due to its efforts to transition to a more competitive energy market structure. However, it added that several challenges needed to be addressed to introduce a more favorable investment climate, including circular debt issues, and the overall condition and coverage of the T&D grid.
It urged the country to further promote domestic exploration and production of oil and nature gas resources, adding that Pakistan had already optimized pricing and licensing mechanisms for further development of its local production of fossil fuels and become more self-reliant.
The report also encouraged policy makers to decrease energy subsidies, continue to support renewable energy sector and introduce emissions trading scheme.
