BMI's Executive Summary

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The new Pakistan Power Report from BMI forecasts that the country will account for 1.7% of Asia/Pacific regional power generation by 2011, with an increasing generation surplus that provides a theoretical export capability of 22twh. BMI's Asia/Pacific power generation estimate for 2006 is 6,167 terawatt hours (twh), representing an increase of 7% over the previous year. We are forecasting an increase in regional generation to 9,041twh by 2011, representing a rise of 46.6%.

Asia/Pacific thermal power generation in 2006 is estimated by BMI at 4,644twh, accounting for 69.9% of the total electricity supplied in the region. Our forecast for 2011 is 6,455twh, implying 39% growth that raises the market share of thermal generation to 71% - in spite of environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Pakistan's thermal generation in 2006 is estimated at 65.4twh, or 1.4% of the regional total. By 2011, the country is expected to account for 1.5% of thermal generation.

For Pakistan, gas is the dominant fuel, accounting for an estimated 50% of 2006 PED, followed by oil at 30%, hydro-electric energy at 12% and coal with a 7% share of PED. Regional energy demand is forecast to reach 5,258mn toe by 2011, representing 47% growth over the period. Pakistan's estimated 2006 market share of 1.6% is set to be unchanged by 2011. Pakistan's estimated 3twh of nuclear demand last year is forecast to reach 7twh by 2011, with its share of the Asia/Pacific nuclear market rising from 0.5% to 1.0% over the period.

Pakistan's overall business environment can be considered unattractive in a regional context, reflecting extremely high long-term political and economic risk, which represents the country's main weakness. Scores in other categories are generally good. Pakistan boasts healthy growth in energy demand and power generation, while having a lower level of import dependency than most Asian states. It has also made reasonable progress towards deregulation and privatisation in the power sector. In the BMI Business Environment Ranking matrix, Pakistan receives a composite score of 22, which ranks the country tenth out of 11 states included in the Asia/Pacific region, ahead only of the Philippines.

BMI is forecasting Pakistan real GDP growth averaging 6.6% per annum between 2006 and 2011, with this year's forecast at 6.4%. Population is expected to expand from 156mn to 174mn over the period, with GDP per capita and electricity consumption per capita both forecast to increase significantly. The country's power consumption is expected to increase from an estimated 90.7twh last year to 129.2twh by the end of the forecast period, leaving theoretical surplus generation (before transmission losses) rising from 12twh in 2006 to 22twh in 2011, assuming 7.8% annual growth in generating capacity.