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Pakistan’s Power Politics

Center for Reserach and Security Studies has recently published a weekly pager last week on the precarious power politics in Pakistan the write up can be downloaded from CRSS as well

In 1985, Xenel Corporation of Saudi Arabia conceived the setting up of a mega-power plant in Pakistan’s private sector. The sponsors of Hub Power Company had to negotiate for nine long years with 11 successive Pakistani governments and at least 40 different bank-lenders before they could sit and sign an Implementation Agreement (IA) with the government of Pakistan then led by Prime Minister Nawaz Sharif (the IA was signed on August 3, 1992). Hub Power’s four steam turbines of 323 MW each, for a total of 1,292 MW, were commissioned on March 31, 1997.

In 1993, the Pakistan Peoples Party won elections. In 1994, Prime Minister Benazir Bhutto unveiled Power Policy 1994. The Private Power and Infrastructure Board (PPIB) was inundated with 116 applications amounting to an accumulated generation capacity of 26,000 MW. The PPIB selected 75 applications — amounting to an investment of some $20 billion — to whom it issued its Letter of Intention (LoI). After further scrutiny and a deposit requirement of Rs100,000 per MW, a total of 33 applicants were issued Letters of Support (LoS). Eventually, 14 of the 33 applicants were able to reach financial close.
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