On July 23, I went to an all-day symposium at the Wilson Center in Washington, DC titled “Pakistan’s Interminable Energy Crisis: Is There Any Way Out?” The symposium drew some pretty big guns, including Pakistan’s Secretary for Water and Power, Nargis Sethi, and the former Director of Operations for the World Bank, Ziad Alahdad. I was interested to hear what the symposium speakers would say about the causes for Pakistan’s difficulties with energy access and their suggested solutions. I also was thinking about what opportunities there might be for the Aga Khan Development Network to take the great successes we’ve had with power projects elsewhere and apply them to Pakistan.
As the speakers each demonstrated in turn, the word “crisis” is by no means an exaggeration when it comes to Pakistan and energy. The country’s power generation, transmission and distributions systems are plagued at every level by inefficiencies so severe that rolling blackouts are a year-round fact of life even in major cities like Islamabad and Lahore. Generation infrastructure is largely outdated and poorly maintained, losses along transmission lines are extraordinarily high, and theft and fraud at the customer level is widespread. Meanwhile, despite vast natural resources, Pakistan has to import huge quantities of petroleum and related products to keep its factories running and its houses lit. This is expensive and unsustainable.
Compounding matters is Pakistan’s deeply unfair application of energy subsidies. As the first speaker – a senior advisor to the Prime Minister on energy issues – put it, “Families who can’t even afford to store milk for their children are spending more than those who are making money from energy usage.” Pakistan’s energy companies need to be more client-oriented in general, said this speaker. Transparency and customer service are terrible.
Resolving such deep, systemic problems will require major efforts and profound changes in energy policy at all levels of government in Pakistan. For example, environmental consequences be damned, Pakistan is going to dramatically increase its coal mining and generation capacity: coal is cheap, easy to use and plentiful beneath Pakistan’s own territory. But the very nature of the problems means that solutions will be slow in coming. In the meantime, many people suffer the effects of life without regular electricity access.
Decentralized, small-scale solutions can help bridge the gap until the national infrastructure comes up to par. At that smaller, community level is where Aga Khan Development Network has made the biggest dent so far in addressing urgent energy needs in Pakistan. In the mountains of Chitral and Gilgit-Baltistan, the Aga Khan Rural Support Programme (AKRSP) has been helping communities finance and install micro hydropower plants. Community members invest their own resources, and AKRSP puts in some funding of its own and to help make up the balance of the funding needed to develop the plant. So far, AKRSP has helped install more than 200 micro micro hydropower plants, with a total capacity of more than 10MW.
All plants are community-managed: members set and collect tariffs to pay for upkeep and maintenance of the infrastructure. So once they’re set up, the plants are all sustainable. The larger micro hydropower plants, with 500-800kW capacity, generate enough extra power to operate as community-owned utilities, selling power to government facilities and to private companies such as brickmaking factories, as well as to neighboring communities that might not be as well-situated to have a micro hydropower plant of their own. Profits are shared among the members whose equity investment made the construction of the plant possible.
These plants – generating clean energy – can change people’s lives by giving them access to light, appliances and machines; by dramatically reducing indoor air pollution; and by lightening the burden on women and children who formerly had to gather wood to burn in household stoves. And the appeal of hydropower plants is spreading to new geographies. Before the symposium I checked in with Abdul Malik, the General Manager of AKRSP, Pakistan. He told me that they’re negotiating an agreement with a provincial government in the north to build 55 new micro hydropower plants on a public-private partnership basis, and that Aga Khan Fund for Economic Development’s Industrial Promotion Services is exploring the possibility of building a medium-scale hydropower plant in the Hunza Valley.
At the end of the day, it was clear that Pakistan’s energy needs are deep and desperate, and that huge changes are needed to improve the situation. But I left the room encouraged that, while Aga Khan Development Network may not be best-placed to take on the enormous coal-mining and gas-pipeline-building projects that the speakers said were necessary for the country’s energy future, our work is helping people address real needs in an affordable, sustainable, environmentally friendly, and effective way.
By Luke Bostian, Program Officer at the Aga Khan Foundation U.S.A.