CPEC to help Pakistan ease power shortages, improve energy mix

Investments under the China-Pakistan Economic Corridor (CPEC) will help ease Pakistan's power shortages, significantly improve its energy mix and boost its gross domestic product (GDP), according to the International Monetary Fund (IMF) in its Staff Report on 2017 Article IV Consultations with Pakistan.

"The planned expansion of energy sector capacity could eliminate Pakistan's 6GW generation capacity gap as of 2016 as early as the end of 2018," it predicted.

The report said Pakistan's excessive reliance on furnace oil would be significantly reduced in the process.

"The impact on GDP will likely come in three stages: construction, power generation, and, over time, the second-round effects on broader economic activity due to increased productivity, lower costs, and improved trade connectivity," the report said, estimating that the first two stages (direct contribution) could bring around US$13 billion to the country’s GDP over the next seven years.

The CPEC is a flagship project of the China-proposed Belt and Road Initiative.