Energy forum turns up power

PUBLISHED : Tuesday, 23 March, 2010, 12:00am
UPDATED : Tuesday, 23 March, 2010, 12:00am

One group of investors with a keen eye on developments in Pakistan is the Hong Kong-based Independent Power Producers Forum (IPPF).

For Pakistan's cotton mills and factories to meet demand, clean and reliable energy supplies are needed, with major players in the sector being urged to invest.

That is why the Pakistani consulate in Hong Kong is looking to the body that represents investors, power suppliers, insurers and service providers in the energy sector to ensure that members can network with key Pakistani officials.

'IPPF members have considerable investments in Pakistan,' says secretary general Joel Laykin, who adds that players with experience of building plants in adverse areas and emerging markets are willing to invest.

Laykin has led forum delegations to Lahore and Karachi to meet high-level officials seeking much-needed investment in energy plants and related projects.

The Asian Development Bank is also providing US$1.18 billion to finance energy projects while reducing Pakistan's reliance on costly, polluting fossil fuels. With energy one of the issues thrashed out between US presidential envoy Richard Holbrooke and Pakistani leaders, Laykin says energy sector investors feel there is a turning point away from the 'unremitting bad news' about terrorist attacks.

'There seems to be a watershed and it all started to pull together last March,' Laykin says of the time when his members watched bemused at the sacking of Pakistan's justice minister, lawyers marching in protest and other troubling events.

'There is an emerging rule of law and the rise of a sophisticated group of people who want to do things right. In terms of investment, things are moving in the right direction. As far as Hong Kong goes, I do not think there is any other city in Asia besides Singapore where there is the presence of people who are prepared to have confidence in Pakistan's energy sector, whether that be coal, hydroelectric or nuclear. There is an amazing amount of involvement from Hong Kong that includes major insurers involved in risk mitigation.'

Laykin says the power purchase agreements that energy companies negotiate with governments often work better in Pakistan compared with the mainland or India.

A fast track for small providers producing less than 50 megawatts can be negotiated in certain provinces such as Punjab.

One Japanese energy giant with substantial investments is Marubeni Power. 'They don't go where angels fear to tread but they are in Pakistan,' Laykin says.

The need for energy supply is highlighted, Laykin says, when a city of nine million people, such as Lahore, struggles with 500 megawatts of power, while Macau uses 450 megawatts for a population of about 600,000.