Studies in Modelling and Decision Support, Second Edition
Edited by M. A. Quaddus and M. A.B. Siddique
Chapter 9: Resources, pollution and sustainable energy policies: the case of Pakistan
The development of sustainable policies for the energy sector is a complex task that poses serious dilemmas for the economies of many developing countries. Pakistan, a developing country with a rapidly growing energy consumer economy, faces a similar situation. According to some recent demand projections, there is a 12 per cent annual growth rate in demand for electricity over the foreseeable future (HDIP, 1990). To meet such a high demand, in 1991–92 the government of Pakistan introduced reforms that provide incentives for private (including foreign) sector investments, particularly in the electric power industry. In response to these lucrative incentives, many independent power producers (IPPs) signed agreements with the government. Most of the IPPs’ offers included oil-, coal-and/or gas-fired electricity generation. Hydroelectric generation, despite its rich resource base in the country, did not hold much attraction for the IPPs, perhaps because it involved very large capital investment.
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