Pak-China Energy Corridor: Opportunities and Challenges

Abstract

Energy is the lifeline for growth of a nation’s economy. Its significance is greater for an energy starved nation like Pakistan. Since last decade, Pakistan has been suffering from acute energy shortage mainly caused by insufficient indigenous energy resources and lack of FDIs in energy sector. Consequently, it depends heavily on expensive imported energy. Given this scenario, in 2015, with the pronouncement of multi-billion dollar CPEC plan with its heavy financial allocation for energy projects, political elites of the then ruling party PML (N) and their officialdom viewed CPEC as full of opportunities to address Pakistan’s energy problems and enhance their own political credibility. The study, therefore, firstly aims to examine the significance of energy and energy security in context of Pakistan and then assesses the notion that growing energy cooperation between Pakistan and China under CPEC can address Pakistan’s energy problems as Pakistan gets its energy basket filled with coal, wind, solar and hydel, power projects along with construction of new transmission lines and development of Thar coal plan and even with more nuclear energy projects, outside CPEC arrangements, all under one umbrella and that too without any political strings attached to these projects. Under given circumstances, Chinese option has been assessed as the best one vis-à-vis other energy supplying contenders to Pakistan. The study also evaluates the opportunities which China can capitalize on the CPEC energy projects along with the challenges being faced by both Pakistan and China in implementation of these projects. Secondly, the study views CPEC as “Pak-China Energy Corridor” rather than merely an economic corridor owing to its major budgetary allocation for energy projects, its foreseeable connectivity with the surrounding energy rich regions and conceivable inter-regional energy trade in future due to Pakistan’s blessed geographical shape and location. Fundamentally, qualitative research methods have been applied along with the content analysis of quantitative data obtained from the energy related public sector organizations. Key Words: Energy, Energy Security, Energy Security of Pakistan, Energy Corridor, CPEC Energy Projects, Opportunities, Challenges