China state co ready to invest $15bn in Pakistan energy sector

Pakistan faced a power shortfall that peaked at between 4,000 and 5,000 MW during the 2010 summer, sparking street protests and adding to the government's problems as it battles a deadly Islamist militancy.

The power crisis has crippled industry, and frequent power outages last up to 18 hours in some rural areas.

Wang Shaofeng, vice president of the state-run China Three Gorges Corp, said he has briefed Pakistani President Asif Ali Zardari and government ministers of his company's proposals.

"We have given the company's plan, that in the following 10 years we can invest $15 billion for 10,000 MW power generation," Wang told Reuters in a phone interview from Islamabad.

"The government, especially the president, is very positive. And also the reflections from the ministers are very positive, especially the minister of finance and the minister of water and power."

He said the proposal outlines at least three projects, and may include wind and solar energy developments, but added that the specific projects have to be decided jointly by the government and his company.

"We would like to have a kind of a deal with the Pakistan government, and if possible also to include the Chinese government," he said.

SOLUTION TO PAKISTAN'S ENERGY CRISIS

Outdated power grids and rampant electricity theft in Pakistan mean that some grid companies experience line losses of up to 30 percent to 40 percent, energy experts say.

But Wang said his company was ready to act as a "total solution provider" for the Pakistani government.

"Initially we are planning to finance a study for the overall assessment and planning for the power structure and for the distribution system to advise the Pakistani government for the future plan. That will be free of cost, our company will finance that," he said.

"With this investment, and also adding up the efforts made by Wapda (Water and Power Development Authority) and the other IPPs (independent power producers), I think this will finally resolve the problems of Pakistani power shortages in the next 10 years."

The company has already signed a $1.47 billion project for the generation of 720 MW energy, for which tariff negotiations are now being held, said Wang.

Analysts say the government should grab this opportunity as quickly as possible, and not let the project suffer because of bureaucratic hurdles.

China, seen in Pakistan as an "all-weather friend", is already committed to controversial plans to expand a Pakistan nuclear power plant using 1970s technology, experts say, even after Japan's crisis triggered global alarm about atomic safety.

Its nuclear ties with long-standing partner Pakistan have triggered unease in Washington, Delhi and other capitals worried about Pakistan's history of spreading nuclear weapons technology, its domestic instability, and the potential holes created in international non-proliferation rules.

Copyright Reuters, 2011

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