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ADB supports Pakistani efforts at energy self-sufficiency.

The loan to the Government of Pakistan for the WAPDA Eleventh Power Project is payable over 25 years including a grace period of 5 years, and will carry an interest rate determined according to the Bank's pool-based variable lending rate system. The loan is the 25th to the power sector in Pakistan.

War in the Persian Gulf has increased the urgency for many countries including Pakistan to become more self-sufficient in energy. The Asian Development Bank (ADB), a major supporter of the energy sector in Pakistan plays a role in domestic energy resource development besides providing other types of assistance to the sector. The WAPDA Eleventh Power Project is one example The ADB approved a US $215 million loan for the project on December 20, 1990. (WAPDA stands for Water and Power Development Authority).

At present Pakistan is estimated to have a seasonal power gap of 1,500 megawatts-during the dry season, industries can not count on a constant 24 hours supply of power. Oil and natural gas are used to meet 70 percent of Pakistan's commercial energy needs, each accounting for about 35 per cent. Hydropower provides an additional 18 per cent, coal and other sources make up the remainder. While natural gas, coal and hydro-power are domestically supplied, 28 per cent of the country's oil is imported. With the fluctuation of oil prices, limited foreign currency reserves have been strained.

Pakistan has great potential to generate all of its own energy. At current consumption/utilization levels, the country's developed oil fields can last for another 12 years and natural gas reserves another 55 years. Untapped oil and natural gas reserves could provide additional oil and gas. Both coal and hydro-power remain under utilized. Coal reserves are thought to be about 300 million tons. It is estimated hydro-power could provide up to 30,000 megawatts-at present a mere 3,000 megawatts have been harnessed.

Through discussions with the Government of Pakistan, the Bank's activities are focused on increasing efficiency and conservation. On the demand side, appropriate pricing policy and load management are supported to keep demand in check. On the supply side, the key objective of Bank activities is to ensure whether the Government can sustain investment in the energy sector. To meet these objectives the Bank is providing loans and grants for projects and studies promoting the efficient use of energy resources already on line. Bank funds have also been made available for projects to develop untapped energy resources.

In addition, creative ways of stimulating development, such as getting the private sector involved are supported by the Bank. "Involving the private sector reduces the Government's capital requirements. Since private sector operations are usually more efficient they set industry standards", says Lars H. Hultin, one of ADB's Senior Project Engineers. For example, both hydroelectric and thermal power projects are supported by the Bank, the former through the public sector, the latter through both the public and private sector. In addition the Bank is supporting loss reduction, energy conservation, the increased use of alternative domestic energy sources, the development of new and renewable energy resources, energy planning and efficient energy demand management, the development of natural gas resources and established oil fields, and the extension of gas transmission systems. Steps are being taken to encourage the private sector to step in and support many of these activities in the future.

The loan to the Government of Pakistan for the WAPDA eleventh Power Project is payable of 5 years, and will carry an interest period of 5 years, and will carry an interest rate determined according to the Bank's pool-based variable lending rate system. The loan is the 25th to the power sector in Pakistan.

The main objective of the Project is to improve the reliability of power supply by strengthening transmission and distribution while reducing losses. The project will support government conservation efforts through the installation of capacitor banks on the premises of improve efficiency but

This will not only improve efficiency but increase the capability of the power network to carry active power. The government will contribute US $ 181 million bringing the total value of the project to US $396 million.
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Title Annotation:Asian Development Bank
Author:Albor, Teresa
Publication:Economic Review
Date:Oct 1, 1991
Previous Article:Petrochemical industry in Pakistan.
Next Article:33 years of water and power development in Pakistan.

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