By Mehtab Haider in The News, Sept 10, 2023
ISLAMABAD: In an effort to attract $25-30 billion in investments from the Kingdom of Saudi Arabia in copper, mineral, refinery
and solar projects, Pakistan will need to address three major concerns of Riyadh to materialize multibillion-dollar investments
in viable projects.
The much-hyped Special Investment Facilitation Council (SIFC), jointly supervised and operated by the military establishment
and civilian authorities, has been playing its role in removing stumbling blocks hindering investment attraction.
Firstly, KSA has expressed interest in constructing a refinery in Hub or Gwadar with an estimated investment of $10-$12
billion. It has been discussing this since 2019, but it has not materialized yet. One of the major concerns expressed by KSA
was providing incentives through the long-delayed Petroleum Investment Policy, mainly due to the 18th Constitutional Amendment,
as provinces were also involved.
Secondly, the incentives offered were below the desired level. This concern has caused delays in materializing the refinery
project. The concerns were related to coordinating policies between the Centre and the provinces and ensuring smooth remittance
of dollars earned in profits and dividends without interruptions. Now, officials involved in negotiations with KSA claim that
much-awaited progress has been made by addressing their concerns, as KSA-specific assurances have been provided. Both sides are
now waiting for a significant event to sign and commence work on the construction of the long-awaited refinery, probably in
Hub, which will attract an investment of $10 to $12 billion. However, no formal date has been confirmed yet.
The Kingdom of Saudi Arabia has also expressed interest in investing in the Reko Diq project to secure 10 to 20 percent of its
shares.
Barrick Gold Corporation and Pakistan’s state-owned enterprises (SOEs), as well as the Balochistan government, will each own 50
percent shares in the Reko Diq project. ……
However, if the Government of Pakistan decides to offload its 10 to 20 percent shares, it would lose management control.
Islamabad is making efforts to convince Barrick Gold to offload a number of equal shares, so that there is no issue of
management control in this multibillion-dollar project.
Some sources suggest that Barrick Gold appears reluctant to offload its shares, making it difficult for Islamabad to offer its
own shares to the Kingdom of Saudi Arabia. ……
Regarding the 600-megawatt solar project, where KSA has shown interest, so far, the regulator NEPRA has yet to determine its
tariff. ……
There are only two options: either to offer attractive rates for solar-related tariffs or leave it for competitive bidding.
This policy decision will now determine the fate of the project.
www.thenews.com.pk/print/1108412-pakistan-paving-way-for-major-ksa-investmentsar project.
