A new World Bank report sheds light on the boost in investment activity within the Pakistani ecosystem. Entitled Private Participation in Infrastructure (PPI) 2020 Half Year Report, the report highlights Pakistan as one of the top five countries in the world with the most investment commitments in the first half of 2020.
According to the World Bank report, Pakistan had the fourth-highest investment commitments during H1 2020, with a total worth of $1.9 billion that accounts for 0.69 percent of its GDP. Not only is this an encouraging indicator of positive investment activity in the country, but it is also the first time Pakistan has made it into the top five in this particular category.
This accomplishment can largely be attributed to the financial closure of the Thar Block-1 Coal-Fired Power Plant, which was the only project to be completed during the first half of 2020.
“The coal power project was developed under the umbrella of the China-Pakistan Economic Corridor (CPEC). It is 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.
The following table sums up the countries with the most investment commitments in H1 2020:
The South Asian region as a whole saw the second-highest investment activity in H1 2020, largely driven by Pakistan ($1.9 billion), India ($1.8 billion), and Bangladesh ($1.2 billion). The report suggests that China has been quite active as a sponsor of infrastructure and developmental projects in the region, particularly in Pakistan and Bangladesh.
With the exception of Pakistan, Bangladesh, Ivory Coast, and Thailand, most of the private investments in energy were made in renewable energy projects. For Pakistan in particular, this was mainly because of the massive coal project. According to the report, the World Bank expects this trend of coal investments to continue for a while.
“This trend is expected to continue because the Government of Pakistan is trying to improve energy security and reduce the average cost of power generation by switching from oil to coal,” the report stated.