Pakistan became one of the five countries with the most investment commitments in H1-2020. This was revealed in the latest report released by the World Bank titled Private Participation in Infrastructure (PPI) 2020 Half Year Report.
According to the report, Pakistan had the fourth-highest investment commitments—a new entrant to the top five countries this year—with $1.9 billion of investment commitments, accounting for 0.69 percent of GDP.
This can be attributed to the financial closure of the Thar Block-I Coal-Fired Power Plant, which was the only project to reach financial closure in the country during this time period, said the report.
The Thar power plant and the pipeline in Mexico were the only two megaprojects to reach financial closure in the first half-year of 2020.
South Asia was the region with the second-highest H1 2020 investment level ($4.9 billion), driven by Pakistan ($1.9 billion), India ($1.8 billion), and Bangladesh ($1.2 billion). In the past few years, China has been an active infrastructure sponsor, speeding up slow progress on major infrastructure projects in South Asia, especially in Pakistan and Bangladesh. Nevertheless, investment levels saw a 33 percent dip from the first half-year of 2019 levels.
Pakistan became one of the five countries with the most investment in the first half-year of 2020, due to a $1.9 billion mega coal power project with 1,329-megawatt (MW) capacity. The coal power project was developed under the umbrella of the China-Pakistan Economic Corridor (CPEC). It is part of an effort by the Government of Pakistan to improve energy security and reduce the average cost of power generation by transitioning from oil to coal.
China still retained its spot in the top five investment commitments but fell from first to third place, with investment commitments of $2.9 billion, accounting for 0.02 percent of gross domestic product. This is a drop from the first half-year of 2019 when PPI investment levels accounted for 0.13 percent of GDP.
The highest investment commitments were in Mexico, which was not in the top five countries in the first half-year of 2019. It accounted for $4.1 billion in investment, equivalent to 0.32 percent of its GDP.
The increased investment level can be attributed to the financial closure of the New Burgos, Cactus, and Isthmus Corridor Pipelines, worth $4 billion. Brazil followed Mexico, with investment commitments of US$3.5 billion, accounting for 0.19 percent of GDP.
Lastly, India had the fifth-highest investment commitments, at $1.1 billion, accounting for 0.06 percent of GDP. In the first half-year of 2020, these five countries together attracted US$14.1 billion, representing 64 percent of PPI investments in EMDEs.
However, the South Asian Region had the lowest amount of investment in renewables (18 percent), with only US$456 million channeled to renewable energy plants versus US$2.1 billion committed to coal power plants. The low rate in SAR was mainly due to the sizable coal project in Pakistan. This trend is expected to continue because the Government of Pakistan is trying to improve energy security and reduce the average cost of power generation by switching from oil to coal, added the report.
The post Pakistan Surpasses India With Higher Investment Commitments in H1 2020 appeared first on .
