Whilst the Company’s key short term objective is to deliver shareholder returns by completing the current project in Pakistan, in the longer term the Company aims to explore investment opportunities in energy projects both in Pakistan and in other jurisdictions, where its project development expertise can add value, focusing especially on countries with a power shortage where there are available sources of international and domestic finance.
Pakistan continues to be affected by electricity shortages which are reducing the potential for economic growth. The Government of Pakistan’s National Power Policy 2013 states that the current shortfall in generating capacity is 5,500MW and projected to rise. The Government is committed to eradicating this shortfall and to diversifying the electricity supply market with particular support for the development of indigenous fuel sources including the Thar Coalfield, Province of Sindh.
The Company’s current activities are closely allied to the above objective which comes with the responsibility to maintain high standards in delivering the project and subsequently rewarding shareholders. The project is strategically placed in Pakistan’s energy mix and has been included in the ‘approved list’ of the China-Pakistan Economic Corridor (CPEC). The CPEC is a bilateral agreement between China and Pakistan, which provides access to Chinese funding for the development of infrastructure, including energy, in a corridor to be established from Pakistan’s North to the South.
World primary energy consumption is predicted to rise 34% by 2035 and this growth will be almost completely focused on the emerging economies with China and India representing 50%. Little growth in the OECD countries is predicted. Population and income are the main drivers behind increasing demand for energy. More than half of the increase in global energy consumption is predicted to be used for power generation as the long-run trend towards global electrification continues. The share of energy used for power generation is predicted to rise from 42% today to 45% by 2035 (source BP Energy Outlook 2016).
Pakistan will need to address its current generation shortfall as well as provide new generation capacity to grow its economy and serve the increasing population in the coming years. Our project has the potential to make a significant contribution in providing electricity for the country.
Oracle’s Board and management see many interesting investment opportunities in energy generation worldwide as power requirements continue to grow significantly, and believe that the knowledge and experience built up through the development of the project in Pakistan can be profitably applied to other projects, whether in Pakistan or further afield. When considering such opportunities the Company will rigorously assess their commercial attractiveness, their fit with the organisation’s skill set, partnership possibilities, and potential sources of funding, mindful of the principles agreed in the Paris conference on climate change.