Pakistan is facing key challenges and issues in the development of social sector mainly in education, health, energy, security and the environment due to lack of policy framework, lack of governance, lack of technological advancement, unstable strategies, lack of leadership, poor project management, lack of innovation and inefficient utilization of resources. Pakistan’s world ranking as per GCI is as follows infrastructure (121st)—particularly for electricity (135th)—remains in a dire state. Moreover, the country displays some of the lowest education enrolment rates in the world and basic education is poor (137th).

1. ABSTRACT
Pakistan is facing key challenges and issues in
the development of social sector mainly in
education, health, energy, security and the
environment due to lack of policy framework,
lack of governance, lack of technological
advancement, unstable strategies, lack of
leadership, poor project management, lack of
innovation and inefficient utilization of
resources. Pakistan’s world ranking as per GCI
is as follows infrastructure (121st)—particularly
for electricity (135th)—remains in a dire state.
Moreover, the country displays some of the
lowest education enrolment rates in the world
and basic education is poor (137th).
Ayesha Majid

2. INFRASTRUCTURAL ISSUES BEING
ADDRESSED IN THE ENERGY SECTOR OF
PAKISTAN
Energy security is an important aspect of the geopolitics of the region, and while it is
common to focus on India as the third-largest primary energy user in the world after China
and the United States, Pakistan also is significant, given its growing economy and large
population of 207 million.
From a geopolitical standpoint, though, Pakistan takes on more importance amid rising great
power competition, rivalries among China, Russia, Iran, India, and the United States in the
region, and specifically as China expands its presence through its Belt and Road Initiative
(BRI) and the China-Pakistan Economic Corridor (CPEC).
Pakistan is a semi-industrialized economy with a presentable textile, food processing and
agriculture base with a per capita gross domestic product (GDP) of US$1,909 in early 2019,
and 58 million people lack access to electricity. Thus, it has to import valuable and finished
goods while its exports consist mainly of semi-finished or unfinished goods. Resulting in
negative balance of payments and an ever-increasing shortage of Dollar. Pakistan has always
been an energy importer and is highly dependent on fossil fuels thus the increase in petrol and
related commodities has further strained Pakistan buying power as a country. Despite the
existence of indigenous natural gas, renewable, and coal resources, Pakistan has become
more dependent on imported oil, gas, and—recently—coal resources. Although it is a small
emitter of carbon dioxide (CO2), unlike India or China, Pakistan is likely to increase its
greenhouse gas emissions, depending on the fuel choices and investments it makes.
BACKGROUND
Pakistan's energy resources consist of fossil fuels (coal, gas and oil), uranium and renewable
energy (hydropower, wind, solar, wood, etc). The main public-sector actors in Pakistan's
electricity sector are WAPDA (Water and Power Development Authority), K-electric
(Karachi Electric Supply Corporation) and the operators of the two nuclear power plants
KANUPP (Kara- chi Nuclear Power Plant) and CHANUPP (Chashma Nuclear Power Plant).
The energy sector’s circular debt has reached Rs1,362 billion mark, of which Rs 755bn is of
the Power Holding Company Limited and Rs 607bn of Standby Term Finance Facility loans.
Hence this results in circular debt. Pakistan’s Circular debt, which stood at Rs1.14 trillion,
has now increased to Rs1.4 trillion. The Circular debt is a cascade of unpaid government
subsidies which results in accumulation of debt on distribution side. The distribution
companies could not pay to independent power producers who in turn are unable to pay to
fuel providing companies.
Currently Pakistan’s primary energy supply amounts to over 70 million Tonnes of Oil
Equivalent (TOE) in 2019. Although primary energy consumption in 2018 grew by 5 percent,
primary energy growth has historically lagged behind economic growth. Between 2007 and
2017, the average rate of primary energy growth was 2.7 percent, compared with a 3.8

3. percent average annual increase in GDP. In Pakistan’s primary energy sources Oil and gas
are by far the most dominating sources with a share of 80%. Oil is imported from the Middle
East mainly Saudi Arabia, gas from Iran. In addition, Pakistan is consuming Liquefied
National Gas (LNG), Liquefied Petroleum Gas (LPG) and coal. The electricity shortage did
not emerge suddenly. It is the direct result of imprudent and reckless energy policies over the
last three decades that impeded the development of cheap and abundant domestic energy
sources. Pakistan's energy bankruptcy is ultimately due to massive institutional and
governance failure. Which have evolved overtime from minute management failures to major
challenges faced by the country today.
KEY CHALLENGES
Pakistan is facing key challenges and issues in the development of social sector mainly in
education, health, energy, security and the environment due to lack of policy framework, lack
of governance, lack of technological advancement, unstable strategies, lack of leadership,
poor project management, lack of innovation and inefficient utilization of resources.
Pakistan’s world ranking as per GCI is as follows infrastructure (121st)—particularly for
electricity (135th)—remains in a dire state. Moreover, the country displays some of the
lowest education enrolment rates in the world and basic education is poor (137th).
The two largest challenges issue faced by the power sector are fuel supply uncertainty and
deteriorating distribution companies (discoms) finances. Considering dominance of coal in
Pakistan’s fuel mix, coal shortages can severely impede investments in
the generation segment.
Efforts have been made by the government at different levels to improve the performance of
the projects through various public sector development programs but no significant
improvement is achieved in performance of projects. To deal with the infrastructure
problems, the supply-demand gap in electricity will be minimized in the short-term.
Investments need to be made for long-term energy supply will focus on projects that are
reliable and cost-effective. An example of this would be joint venture of Abraj Capital with
KSE.
The infrastructural issues faced by energy sector are:
1. Leakages and theft of power supply
2. Fiddling of meters
3. Bribing of meter readers and other staff members
4. Excessive reliance on expensive, imported oil
5. Outdated equipment
6. Transmission and distribution (T&D) losses due to technical issues
7. electricity shortage causes an annual loss of 7% in GDP and 2% reduction in real
GDP growth.
Due to these issues the federal government has set-up these goals in their 2025 vision:
1. Eliminate current electricity supply-demand gap by 2018, and cater to growing future
demand by addition of 25,000 MW by 2025

4. 2. Optimize energy generation mix between oil, gas, hydro, coal, nuclear, solar, wind
and biomass – with reference to its indigenousness, economic feasibility, scalability,
risk assessment and environmental impact
3. Complete two major hydel projects: Diamer Bhasha and Dasu dams
4. Operationalize the immense potential of Thar coal and complete Gaddani Energy Park
with 6600 MW capacity.
5. Tap Pakistan’s huge potential for alternative energy
6. Complete new Nuclear power generation plants
7. Maximize distribution efficiency and cut wasteful losses through investment in
transmission and distribution infrastructure and effective enforcement of controls
8. Address institutional fragmentation and decay of the sector due to poor capacity.
9. Focus on demand management and conservation to ensure prioritization in allocation,
elimination of wasteful use, incentives to use more energy efficient equipment and
appliances and achieve better balance between peak and off-peak hours
10. Introduce institutional reform and strengthen regulatory frameworks to improve
transparency and efficiency.
CONCLUSION
The way forward for Pakistan is to upgrade their power generation systems and make
maximum utility of the natural sunlight it receives. The currently Pakistan aims at achieving
5-6% of its total on-grid electricity supply from renewables (excluding large hydropower) by
2030 of the Total installed power capacity of approximately 26 GW.