Pakistan Institute of Development Economics

P & R Vol.2 Issue 5
In power projects: History, Policy and Politics
Publication Year : 2021
Author: Afia Malik

About three decades ago, a structural change took place in Pakistan’s power sector as market-oriented reforms were introduced. The objective of these reforms was to introduce competition in generation and supply and achieve cheap pricing for consumers. As a part of these reforms, Pakistan invited independent power producers (IPPs). However, neither competition nor cheap prices for consumers have been achieved so far. Besides, since the formal commissioning of first IPP in Pakistan in 1997 to date, these IPPs have remained involved in corruption accusations, disputes/ litigations over the set rates, payments and profits. This article argues that the political environment, institutional strengths and interests of stakeholders are as important as the technical and economic considerations in attracting private investment and ensuring its positive outcome.