New energy economic zones to attract funding

(MENAFN- Khaleej Times) The planned South and Central Asia-China Energy Zone (SCACEZ) is attracting more funding and member countries. The total new funding comes to more than $52 billion with a big chunk being provided by China alone which comes to $46 billion.

The SCACEZ will ensure massive electricity supply and low-cost connectivity that will expand competitive and larger volume of international trade. As building of the $46 billion China-Pakistan Economic Corridor (CPEC) gets going at a high speed more and more countries ranging from Iran to Saudi Arabia and the GCC are figuring-in.

Saudi Arabian Minister for Economic Planning Engineer Adil Al Faqih who was in talks with Pakistani Minister for Planning and Development Ahsan Iqbal last week in Riyadh showed interest in Pakistani projects.

Adil Al Faqih said: "Saudi Arabia is keen to work with Pakistan and China and desires that the mega project of CPEC should be extended to the Red Sea and Africa."

The two ministers also discussed economic cooperation between Saudi Arabia and Pakistan. They also discussed the progress on the implementation of CPEC and Prime Minister Nawaz Sharif's economic development plan "Vision-2025" Iqbal said.

The energy and infrastructure development in the region with Pakistan as its nucleus also appear big in the report of the Manila-based Asian Development Bank (ADB).

Stressing the urgency of energy for Islamabad and the region ADB's annual report said: "Pakistan has benefited from soft international oil prices which account for almost a third of its imports yet the country's economy failed to achieve its growth potential.

It said: "This was due to weak performance in exports caused by structural issue such as a lack of diversification and supporting infrastructure in the manufacturing sector."

These sectors were hit by acute energy shortages that have eaten up two per cent of GDP.

The ADB disclosed: "The infrastructure portfolio is projected to account for almost 80 per cent of the ADB approvals during 2016-18. In Afghanistan and Pakistan ADB will focus on increasing energy access and developing off-grid systems with renewable energy technologies."

At the same time ADB is of the view that "growing regional cooperation and integration investments under the Central Asia Regional Economic Cooperation (CAREC) programme will ensure physical connectivity in all CAREC countries improve policy in Kazakhstan and the Kyrgyz Republic and streamline trade across the borders of the Kyrgyz Republic Pakistan and Tajikistan."

The Manila-based bank is quite upbeat about its highly productive power generation energy connectivity and expansion plan for Central Asia-Pakistan.

It said the ADB's flagship initiative for regional cooperation and integration the Turkmenistan Uzbekistan Tajikistan Afghanistan Pakistan power interconnection will enable about 900 gigawatt-hours of power to be supplied to Afghanistan and the region by 2019.

Governments sharing the planned Central Asia-South Asia (CASA-1000) electricity supply project have in a meeting held at Almaty have just decided that the foundation stone of the project will be laid down in Dushanbe Tajikistan on May 11. It will supply electricity from Tajikistan and Kyrgyzstan to Afghanistan and Pakistan.

Khawaja Mohammad Asif Pakistani Minister for Water and Power said CASA-1000 will cost $1.1 billion including $208 million for equipment and taxes. The cost of construction of Pakistani portion of the project which is included in the overall amount is $200 million. The World Bank has approved $120 million loan and Jeddah-based Islamic Development Bank has extended a $35 million credit.

Asif said CASA-1000 Transmission Line to Pakistan will be capable of delivering 1000mw to Pakistan and 300mw to Afghanistan. However the Afghan share of 300mw may be available to Pakistan if the demand from Afghanistan is low. The supply line will be 750 kilometer long and will provide high voltage direct current transmission.

The Asian Development Bank continued its transactions with Pakistan in 2015 for the planned 1600 kilometre Turkmenistan-Afghanistan-Pakistan-India (Tapi) natural gas pipeline project. Tapi will export up to 33 billion cubic metres of natural gas a year from Turkmenistan to Afghanistan Pakistan and India over 30 years. Turkmengaz has been appointed its project manager. The shareholders Agreement has been signed. The completion of Tapi Turkmenistan stretch started in December last. The ADB said its loan of $30 million to Engro Elengy Terminal will support the country's first liquefied natural gas re-gasification facility. It will provide facilities to diversify Pakistan's energy base. The bank also has provided a loan of $65 million for a 102mw hydropower project in Gulpur Pakistan.

A power transmission project in the northwest region of Uzbekistan is helping improve the country's energy efficiency. The ADB is continuing this work to improve water supply sources management increase the productivity of irrigated farming and to provide social recovery from floods in Punjab and northern district of Haveli Kotli and Poonch.

The bank has okayed a big $1 billion plan for projects to implement transport and trade.

The writer is based in Islamabad. Views expressed by him are his own and do not reflect the newspaper's policy.The Bank is also helping Pakistan upgrade 328 kilometres of provincial highways in Sindh and is funding a motorway connecting Pakistan's textile-producing hub - Faisalabad with Multan the major trade centre in southern Punjab.

The ADB is undertaking a separate project to construct modern border infrastructure and facilities at Chaman and Torkham -the two main transit points for growing cost-effective land trade with Afghanistan and central Asia and with Wagah on Pakistan's eastern border connecting the region with India and South South East Asia Japan and the Far East.

Pakistan has benefited from soft international oil prices which account for almost a third of its imports

Asian Development Bank