Pakistan among Top Five countries with highest investment commitments: WB Report

Pakistan has emerged as one of the top five countries with the most investment commitments in H1 2020, as per the World Bank’s IBRD IDA latest report titled Private Participation in Infrastructure (PPI) 2020 Half Year Report.

As per the report, Pakistan had the fourth-highest investment commitments—a new entrant to the top five countries this year—with $1.9 billion of investment commitments, accounting for 0.69 percent of its GDP. This can be attributed to the financial closure of the Thar Block-I Coal-Fired Power Plant, which was the only project to reach financial closure in the country during this time period.

“The coal power project was developed under the umbrella of the China-Pakistan Economic Corridor (CPEC). It is part of an effort by the Government of Pakistan to improve energy security and reduce the average cost of power generation by transitioning from oil to coal,” stated the report.

SAR was the region that saw the second-highest H1 2020 investment level (US$4.9 billion), driven by Pakistan (US$1.9 billion), India (US$1.8 billion), and Bangladesh (US$1.2 billion). As per the report, in the past few years, China has been an active infrastructure sponsor, speeding up slow progress on major infrastructure projects in South Asia, especially in Pakistan and Bangladesh. Nevertheless, investment levels saw a 33 percent dip from the first half-year of 2019 levels.

However, as per the report the SAR showed low rate of investment in renewable sector, which was mainly due to the sizable coal project in Pakistan.

“This trend is expected to continue because the Government of Pakistan is trying to improve energy security and reduce the average cost of power generation by switching from oil to coal<” the report stated.

At a country level, with the exceptions of Bangladesh, Côte d’Ivoire, Pakistan, and Thailand, most of the private investments in energy were in renewable energy projects.

The report further highlighted that the South Asia region’s commercial debt financing ($1.4 billion) was the highest, accounting for half of the total commercial debt raised globally. Most of this commercial debt came from the Thar Block-I Coal-Fired Power Plant in Pakistan and the Dhaka Elevated Expressway in Bangladesh—a combined commercial investment of US$1.1 billion.