Finance Minister Muhammad Aurangzeb is set to meet Geoffrey Ross Pyatt, the U.S. Assistant Secretary of State for Energy Resources, during his upcoming visit to Washington. The discussions will focus on issues in the energy sector and potential financial support for energy projects, according to reliable sources.
On October 17, 2024, U.S. Ambassador Donald Blome met with the Finance Minister, where topics included economic matters and the performance of the energy sector. Blome requested information regarding the proposed restructuring of Chinese power sector debts and its overall effects on Pakistan’s economy. Aurangzeb informed him that Pakistan and China are working with consultants to finalize favorable terms for managing these debts over the coming years.
Both Pakistan and China were poised to start signing debt restructuring agreements during the recent visit of the Chinese Prime Minister, but this was put on hold due to a tragic incident in Karachi that resulted in the loss of Chinese lives.
During his visit from October 21-26, 2024, for the IMF-World Bank annual meetings, the Finance Minister is also expected to address issues related to five wind power projects backed by the U.S. International Development Finance Corporation (DFC). The two sides have yet to reach a satisfactory agreement on this matter.
Previously, in May last year, the U.S. Ambassador had indicated that DFC would withhold investment in Pakistan until the wind power project issues were resolved. The Pakistan Embassy in Washington has conveyed that the U.S. is serious about resolving these matters as a prerequisite for future energy sector investments.
Sources suggest that, rather than simply agreeing to lower tariff discounts for the five wind projects, the DFC has proposed extending the loan term by five years and reducing the interest spread. This is aimed at providing Pakistan with a significant tariff reduction immediately, establishing a new benchmark for future foreign financing, and enhancing the country’s balance of payments by extending debt repayment periods.
The ongoing Iran-Pakistan Gas Pipeline situation and informal petroleum product imports are additional concerns for Washington, which are expected to arise in discussions with the Finance Minister.
Disputes with India regarding hydroelectric projects in Occupied Kashmir are also anticipated to be discussed. In March of the previous year, Pakistan and the U.S. engaged in an energy security dialogue, reaffirming their commitment to advancing renewable energy and fostering a stable and prosperous energy future for both nations.
Both governments aim to deepen their partnership through the U.S.-Pakistan “Green Alliance” framework, designed to collaboratively address climate, environmental, and economic challenges, particularly in renewable and sustainable energy sectors.
