Principal Country Officer, International Finance Corporation (IFC), Shabana Khawar on Tuesday hinted that the organisation will invest $10 billion in Pakistan to expand generation capacities and support transmission and distribution systems. She was addressing a conference on "sustainable industrial growth in Pakistan" jointly organised by National Productivity Organisation (NPO), a subsidiary of Ministry of Industries and Production(MoI&P) and Cleaner Production Institute (CPI).
Abdul Ghaffar Khattak, CEO, NPO, Azher Uddin Khan, CEO, CPI and other experts spoke on the occasion. Shahbana Khawar said, "IFC, a member of the World Bank Group, is one of the largest investors in Pakistan's power sector. Since 1994, IFC has committed investments of around $850 million across 16 projects to support incremental generation capacity of over 5600 megawatt hours (MWh). This makes IFC the largest financier in the private power sector of Pakistan."
IFC's current portfolio in the power sector amounts to around $480 million in 11 projects. FY14/15 is a record year for IFC with commitments of around US one billion dollars, which include financing of two wind, one hydro and one LNG terminal, besides the landmark transactions of establishing a platform company with China Three Gorges Corporation and support to Habib Bank's divestment.
"Across the World Bank Group, we leverage our resources to catalyze more funding from the private sector and key development partners. Our Transformational Energy Initiative intends to mobilise at least $10 billion in investments to expand generation capacities, and support transmission and distribution systems. It also supports policy reforms to boost the efficiency and financial viability of the energy sector," she added. "Our work in Pakistan has shown that industries are inefficient in energy use compared to average international benchmarks," she continued.
IFC argues that as economic growth puts pressure on natural resources, industries compete for water use with extensive agricultural production, and they compete for energy use with power production in a country already suffering from high electricity load shedding. Industrial resource efficiency improvements can help address these challenges by implementing energy, water, and materials savings practices and technologies, while also addressing climate mitigation priorities for Pakistan.
There are more than 6,000 registered boilers in Pakistan, out of which 50 percent are second-hand with very low efficiency. Current advisory efforts seek to work on two fronts - directly with industries to identify boiler efficiency improvements, as well as the Government of Punjab and the central government to develop a detailed programme on standards for motors and efficiency regulations for boilers. She said reducing the amount of power, water, and raw materials used in industry would help alleviate Pakistan's crippling energy shortages, conserve natural resources, and increase manufacturing productivity.
CEO NPO said that implementing energy and water efficiency practices could help save more than $76 million in energy costs, equivalent of about 25 percent of the electricity required for the city of Karachi. "We have conducted 229 audits of different industries. The consolidation of this data has helped us to move into a direction which will remind the policymakers, the vendors, and the industrialists etc to move to a specific direction because until and unless we identify a certain problem we will never find a solution," he added.
CEO CPI Azher Uddin Khan said that his organization's work aims to demonstrate the business case for resource efficiency by showcasing the market volume and interest in savings measures. IFC, in partnership with the Australian Department of Foreign Affairs and Trade, Korea Green Growth Partnership, and the Earth Fund Platform, supported the production of this report. It is part of a larger IFC effort to raise awareness about the opportunities and obstacles facing industrial manufacturers.