May 21, 2024
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Liberty Power’s Acquisition Marks Major Investment in Pakistan’s Energy Sector

Pakistan’s Liberty Power Holding has sealed a groundbreaking deal, acquiring the thermal energy assets of Engro Corp, the nation’s largest conglomerate, for a staggering $125 million. This move underscores Liberty Power’s strategic bet on Pakistan’s coal reserves and the reform initiatives outlined by the International Monetary Fund (IMF), signaling a pivotal moment for the country’s beleaguered power sector.

The agreement encompasses Engro Corp’s thermal assets, including the renowned Sindh Engro Coal Mining Company, marking one of the most significant transactions in Pakistan’s energy landscape. Liberty Power’s Chief Operating Officer, Zain Mukaty, emphasized the pivotal role of Thar Coal in Pakistan’s energy future, citing its indigenous nature, cost-effectiveness, and base load capacity.

Pakistan’s energy sector has long grappled with issues such as power theft, distribution losses, and mounting debt, prompting urgent calls for structural reforms. The IMF’s policy directives, part of a $3 billion standby credit arrangement with Pakistan, have instilled confidence in Liberty Power’s investment outlook, particularly amid the recent caretaker government’s efforts to address circular debt through energy price adjustments.

Prime Minister Shehbaz Sharif’s administration continues to prioritize reforms, aiming to secure a longer-term bailout from the IMF to bolster reserves and mitigate risks. Mukaty, a Wharton graduate, underscores the imperative of addressing circular debt reduction as a key aspect of the IMF’s future program.

Liberty Power’s pivot to coal aligns with Pakistan’s need to leverage indigenous resources amid foreign exchange constraints. Mukaty highlights the government’s push for coal-powered plants to transition to local coal, positioning domestic coal as a strategic asset for long-term energy security.

As Pakistan navigates its energy landscape amid economic challenges, Liberty Power’s strategic move underscores a concerted effort to harness indigenous resources and address systemic vulnerabilities, signaling a transformative shift in the nation’s power sector dynamics.

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