Attracting FDI towards the power generation sector of Pakistan

The purpose of this study is to elaborate the investment opportunities into the power generation sector of Pakistan, for foreign investors. Time series data for the period of 1991-2008 has been used for analysis. And then we investigated the overall condition of investment environment for the foreign investors in Pakistan. It is revealed that, after the beginning of liberalization program, initiated in 1991-1992, the overall FDI inflows into Pakistan have shown an upward mobile trend. Pakistan needs an enhanced electricity capacity of more than 5,000 MW until 2010 (Figure I.). This is a vibrant opportunity for foreign investors to invest in this sector, as the government of Pakistan provides foreign investors with a liberal investor friendly policy, tariff reforms and 100% foreign ownership of capital (BIS Review 9/2004). Though, the cost of doing business is increasing in Pakistan but it is still competitive in the region.