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Security situation in Afghanistan critical for Pakistan’s energy sector

in Afghan Business

Security situation in Afghanistan critical for Pakistan’s energy sector

energy sectorThe Asian Development Bank has warned that political situation in Afghanistan may affect progress on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project.

Pakistan must address its energy sector bottlenecks that have hit economic growth, resulting in increasing unemployment in the country.

Faced with domestic supply shortages of coal, oil, natural gas and hydroelectric generation capacities, Pakistan’s power sector has been severely affected, leading to a significant decline in power production.

“At its peak, the gap between electricity demand and supply was as high as 40%,” according to the ADB report. Until 2035, Pakistan’s annual economic growth would be rather moderate at 3.4% unless infrastructure development is sufficient to facilitate economic activity, it added. (The Tribune).

Pakistan must, therefore, security foreign energy supplies to meet its power demand, which is projected to grow at a rate of 2.2% annually.

In a bid to diversify its energy sources, the country is already working on the Iran-Pakistan gas pipeline project, which is facing delays due to US sanctions against Iran and inability of Pakistani authorities to arrange funds for constructions of its side of the pipeline.

The gas sales and purchase agreements of the TAPI project was signed in May 2012 in Turkmenistan.

However, securing energy supplies through TAPI will be very critical amid a volatile security situation in Afghanistan.

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