Pakistan’s Liberty Power Holding is making a substantial $125 million wager on the country’s beleaguered power sector, anticipating substantial returns. The company recently finalized a deal to acquire the thermal energy assets of Engro Corp, including Pakistan’s premier coal producer, Sindh Engro Coal Mining Company.
“We believe Thar Coal is the energy future of Pakistan, it’s indigenous, it’s cheap and it’s base load,” stated Zain Mukaty, Chief Operating Officer of Liberty Power, emphasizing the significance of the coal deposits in the Thar desert.
The power sector in Pakistan has long struggled with issues like power theft and distribution losses, leading to significant debts across the production chain. The International Monetary Fund (IMF) has highlighted these concerns, offering policy suggestions tied to its standby credit arrangements with Pakistan.
The recent caretaker government and the current administration led by Prime Minister Shehbaz Sharif have been implementing reforms, including raising energy prices to address circular debt accumulation, a critical requirement set by the IMF.
Mukaty emphasized the importance of utilizing domestic coal reserves amidst Pakistan’s foreign exchange challenges, highlighting the long-term benefits of such a strategy. He stressed the need for further exploration and development of domestic coal resources for the country’s benefit.
Liberty Power’s investment in coal reflects a strategic move to navigate Pakistan’s economic challenges while aiming for sustainable long-term growth in the energy sector.
