China Pakistan Economic Corridor Investment in Power Project and Emerging Narratives in Pakistan: A Political Economic Perspective

Abstract

Pakistan has been suffering from an energy deficit for over a decade, accounting for approximately
2% of the country's GDP. One of the major CPEC investments is in the energy sector, which accounts
for 60% of the total investment and amounts to approximately US$35 billion in Pakistan's electric
power sector, with the goal of increasing Pakistan's power production capacity. These projects are
producing surpluses in power as according to the Pakistan Economic Survey 2019-20, the installed
electricity generation capacity reached 37,402 MW in 2020, whereas Pakistan's total demand is
nearly 25,000 MW. The surplus is due to 17 energy projects installed in various cities, which added
13000 MW to the National Grid Station. However, the CPEC investment in the energy sector has
become a contentious issue, with many criticizing the project's political and economic management.
How political economy influences state's decision making, undermining economic sector
performance despite a lot of efficient projections. This paper will evaluate the influence of CPEC
investments in power projects on Pakistan's power crises and will conclude with a political and
economic perspective on the subject issue.