British investment agency considers investment in Pakistan’s energy sector

ISLAMABAD: The British International Investment (BII) Board, a UK-based development finance institution, has expressed interest in investing in Pakistan’s energy sector, particularly in improving the transmission system.

The interest in the venture was expressed by a delegation from British International Investment (BII) during a meeting with the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, at the Department of Finance on Friday.

The meeting was attended by BII Chief Executive Officer Nick O’Donohoe, Chairperson Ms Diana Layfield, Managing Director and Head of Asia Srini Nagarajan, Regional Director South Asia Habib Yousaf, Chief Development Officers Alex Woods and Ms Jo Moir, Senior Economic Advisor Louie Dane and officials from the treasury department, a press release said.

The Minister gave an overview of Pakistan’s improving economic situation, including GDP growth rate of 2.4 per cent in fiscal year 2024, which is expected to increase to about 3.6 per cent in fiscal year 2025, increase in foreign reserves to USD 9.4 billion, restored investor confidence in capital markets and decline in CPI inflation to 12.6 per cent in June 2024 and growth in remittances from abroad by 7.7 per cent compared to last year.

He highlighted the successful conclusion of the 9-month Stand-by Arrangement (SBA) with the International Monetary Fund (IMF) and the government’s commitment to achieving sustainable economic growth in the future under the medium-term programme supported by the Fund, on which negotiations are ongoing.

The Minister also stressed that increasing the tax-to-GDP ratio to around 13.7% in the medium term is the government’s priority through increasing the tax base and comprehensively digitizing the FBR. He then presented initiatives taken in the energy sector to reduce the costs of generation and privatization of distribution companies.

It was further emphasized that the government is working on reforming state-owned enterprises, privatization, adjusting the size of government and attracting investments through public-private partnership.

The importance of Foreign Direct Investment (FDI) was highlighted and the role of the Investment Facilitation Council (SIFC) in attracting FDI in priority areas of energy, agriculture and information technology (IT) sectors was discussed.

The delegation from British International Investment appreciated the government’s initiatives aimed at stabilizing the economy and improving the investment environment. They also expressed interest in investing in the energy sector, in particular in improving the transmission system.

The Minister encouraged the delegation to engage with the Special Investment Facilitation Council (SIFC), presenting it as a pragmatic platform to attract foreign investment and provide a streamlined process for investors.