The South Asian countries continue to suffer from energy shortage. A solution could be cross-border power-sharing, provided other glitches are removed.
The countries of South Asia have hu-ge energy generation potential but the per capita consumption is the lowest, just a little better than countries located in the sub-Saharan region. This can be attributed to a number of factors that include bad government policies, inability to mobilize capital, shyness of local investors and, above all, massive pilferage due to high tariff. As these countries are dependent on multilateral financial institutions (MFIs) for the much needed funds, they are forced to adopt policies of the lenders rather than exploiting indigenously available fuels. Since the developed countries have the biggest MFIs, the preferred choice remains fossil oil.
Lately, the MFIs have been trying to convince the South Asian countries to go for cross-border supplies based on the successful model being followed by such countries as India, Nepal, Bhutan and Bangladesh. It is not quite clear why a similar agreement could not be arrived at between two of the largest member countries of SAARC – India and Pakistan - which share hundreds of kilometers of common borders and
also enjoy the status of being atomic powers? The reply is simple: animosity spread over decades.
Pakistan is the worst victim of the policies of the MFIs, which played a major role in the creation of independent power plants (IPPs) in the country with a combined generation capacity of over 8,000MW. Pakistan has not been able to construct any mega hydel power plants since completion of the Tarbela Dam in 1976. Contrary to this, India has been constructing dams in violation of the Indus Water Treaty signed between the two countries in the 60s.
Among the South Asian countries, India has the largest population and the government succeeding governments there have been taking steps to boost power generation. As a result, the country has added new and diversified generation capacity. According to estimates, the presently installed generation capacity in India exceeds 270,000MW but, out of this, nearly 190,000MW is thermal-based. India has been blessed with huge coal reserves, which contribute over 165,000MW. The country has not been able to achieve a significant breakthrough in hydel and wind power but nearly 50,000MW is contributed by captive plants. India has the world’s fifth largest wind power generation capacity, which is 6% of the total installed capacity. The country also gets supplies from neighboring countries, in return for the investments it has made.
Pakistan is the second largest member of SAARC and has nearly 20,000MW generation capacity. The bulk of this comprises thermal generation, which is mostly furnace oil-based. In the past, when crude oil price hovered at around US$147 per barrel, a strategic decision was made not to pass on the increase in the cost to the consumer. As a result, circular debt developed and ballooned to billions of rupees. Since coming into power, the PML-N government has paid over Rs750 billion to clean the slate but the circular debt has kept on mounting mainly because the government has not been able to overcome two of the most contentious issues: colossal pilferage and mounting receivables. Pakistan has two treasures: Thar coal and the mighty Indus. If these two resources are properly exploited, the menace of load shedding can be overcome and the cost of generation can be brought down significantly, leaving no incentive for the pilferage of electricity.
In terms of population, Bangladesh suffers the acutest shortfall in power generation. The country has one of the lowest per capita electricity consumption and around 60% of the population has access to this most important utility. The country is dependent on India for meeting its power demands as well as construction of new power generation plants. The country is rich in water resources and also has gas but hardly any oil and coal reserves. Though, the government is making efforts to overcome the prevailing shortage, the lack of good governance is a major cause for delays and overruns and pilferage of electricity is also common.
Nepal is a small country but it is blessed with water resources that help in hydel generation. According to available information, the country has nearly 800MW generation capacity, out of which over 730MW comprises hydel generation. The country has no known reserves of oil, gas or coal. Nepal is also dependent on India for meeting its requirements for funds for hydel projects and in return, India also buys electricity from Nepal.
Sri Lanka has slightly less than 3300MW generation capacity, half of which is hydel while the remaining is thermal based. Like other South Asian countries, Sri Lanka also suffers from an acute shortage of power supply. It can be said that the country years of civil strife prevented it from undertaking developmental work, particularly in terms of power infrastructure and utilities.
The fallout of an acute shortage of electricity in South Asia is that these countries, excluding India and Pakistan to some extent, do not have a strong industrial base. Further, many experts remain skeptical about cross-border supplies for two reasons: animosity among the countries and lack of funds for the construction of mega hydel or thermal power plants.
It is interesting to note that while ndia suffers from an acute shortage of electricity, it keeps offering Pakistan the option to buy electricity from it. This kind of offer often makes the decisionmakers in Pakistan jittery. In addition, the recent utterings of the Prime Minister of India hardly leaves any room for Pakistan to buy electricity or gas from India which has also emerged as the biggest opponent of the China Pakistan Economic Corridor (CPEC).
India has also withdrawn from the Iran-Pakistan-India (IPI) gas pipeline poject, taking refuge behind the poor security situation in Balochistan. It had gone to the extent of expressing the fear that Pakistan may suddenly disrupt the gas supply. If India is not willing to trust Pakistan, why does it expect Pakistan to give its lifeline into the hands of an enemy which imposed three wars on it and is also most blatantly opposed to CPEC?
It is not a cliché but a fact that if India, Pakistan and Bangladesh were to join hands, they would become the fastest growing economies of the region and support the smaller South Asian countries. The unification of Germany, the revival of ties between Germany and France and the growing size of the EU shows that cordial diplomatic relations could usher a new era of cooperation and prosperity for the whole region. If South Asia could cooperate on the power generation and transmission front, it would bode well for the ideals of SAARC. The writer is an economic analyst. He writes for various local and foreign publications.