‘Pakistan among Top Five nations with highest investment commitments’

• Pakistan has been listed among the top five countries with the highest investment commitments.
• The nation’s progress was highlighted in a report by the World Bank.

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.

According to 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% of its GDP.

This can be attributed to the Thar Block-I Coal-Fired Power Plant’s financial closure, which was the only project to reach financial closure during this period.

“The coal power project was developed under the umbrella of the China-Pakistan Economic Corridor (CPEC). It’s 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.

South Asia 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).

According to 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% dip from the first half-year of 2019 levels.

However, the SAR showed a low investment rate in the renewable sector, mainly due to Pakistan’s sizable coal project.

“This trend is expected to pursue as the Pakistani Government is trying to improve energy security and reduce the average cost of power generation by switching from oil to coal,” the report stated.

With the exceptions of Bangladesh, Ivory Coast, Pakistan, and Thailand, most of the private energy investments were in renewable energy projects at a country level.

The report also highlighted that South Asia’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.

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