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October 25, 2020

Electricity, Energy Management Can Help Alleviate Pakistan’s Energy Woes-IFC-Funded Report

An efficient use of water and energy in the industrial sector can help Pakistan alleviate is energy woes, as the South Asian country struggles to overcome chronic power shortages that is hampering economic growth and productivity.

A new report, funded by the International Finance Commission, a member of the World Bank, said that cutting down on use of power, water and raw material in industry would help Pakistan address the problem of crippling energy shortages, conserve natural resources and increase manufacturing productivity.

The report was led by the National Productivity Organization (NPO) and the Cleaner Production Institute (CPI). IFC, in partnership with the Australian Department of Foreign Affairs and Trade, the Korea Green Growth Partnership, and the Earth Fund Platform, supported the production of this report.

Some industries could save more than one-fifth of their power consumption, along with billions of Pakistani rupees, by embracing energy-efficient technology, according to the findings that came from an analysis by Ernst and Young of more than 200 resource efficiency audits from manufacturers in the textile, sugar, leather, and pulp and paper industries.

“Implementing energy and water efficiency practices could help save more than $76 million in energy costs, the equivalent of about 25 percent of the electricity required for the city of Karachi,” said Abdul Ghaffar Khattak, Chief Executive Officer of the NPO, citing the analysis.

Results varied for each industry. The textile sector, a key foreign currency earner, could save nearly 22 percent of its total energy consumption by implementing cleaner production technologies.

The sugar industry, which places Pakistan among the world’s 10 largest producing nations, could also save at least 1.7 billion Pakistani rupees annually by investing in efficiency improvements.

But there are challenges. The study highlighted obstacles to improving sustainability in the industrial sector, which included weak enforcement of environmental regulations and a lack of financial investment in energy-efficient production. One of the reasons for this is often insufficient awareness about cleaner production technology and its benefits.

“By adopting energy and resource efficiency practices, industries can become more efficient and increase their productivity,” said Nadeem Siddiqui, IFC Senior Manager in Pakistan. “Partnering with leading institutions in Pakistan in research like this is an important part of IFC’s strategy”

IFC is one of the largest investors in Pakistan’s power sector. Pakistan represents IFC’s second-largest exposure in the Middle East and North Africa region.

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