Merkel Says Security Is Key To Increased Investment In Pakistan Energy

German Chancellor Angela Merkel has told Pakistani Prime Minister Nawaz Sharif that her country is interested in increasing its investment in providing much-needed energy to Pakistan, but only if security there is improved.

During a meeting in Berlin on Nov. 11, Merkel said Germany’s state development bank, KfW, already had helped finance energy projects in Pakistan, including two hydroelectric stations, but she expressed concern about the violence in the country by Islamic militants and Pakistan’s long-standing tensions with neighboring India.

“We can look at intensifying these [investments] as long as the conditions are right," she said at a joint news conference with Sharif. “It is important that the prime minister is successful in improving the security situation and the legal system so that investors feel safe.”

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For his part, Sharif urged German companies to increase their investments in Pakistan’s energy sector. “Pakistan is facing an acute shortage of energy,” he told the news conference. With Germany’s help, he said, “We believe in the next three years we should be able to have at least additional capacity of about 4-5,000 megawatts of electricity.”

Sharif said he knows that companies in Germany are eager to invest in Pakistan, and that Merkel had promised him full cooperation in ending his country’s energy crisis. He also thanked the chancellor for her country’s move to expand its program of technical training for Pakistani engineers.

As for security, Sharif said Pakistan has suffered greatly in its fight against Islamic militants and its support of the US effort to oust the Taliban in neighboring Afghanistan after the attacks of Sept. 11, 2001. He said Pakistan would “overcome terrorism at all costs.”

Pakistan’s relations with Afghanistan have been strained in the past decade because of Kabul’s fears that Islamabad supports Islamic militants in the region. As if to counter that perception, shortly before he left Pakistan for Germany, Sharif told Afghanistan’s new president, Ashraf Ghani, that he supports Ghani’s offer to hold peace negotiations with the Taliban.

At the Nov. 11 news conference, Merkel expressed support for the talks. “We want as much as you do that what has been achieved in Afghanistan is not threatened. ... [A] stable Afghanistan is in the best interest of Pakistan.”

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Merkel also said her country plans to keep working on improving Germany’s and the EU’s political and economic relations with Pakistan. “We will further strengthen economic cooperation with Pakistan, we want to assist Islamabad in various sectors,” she said.

Sharif said that since Germany shifted its focus from fossil fuel to environmentally friendly power generation, its companies are leaders in renewable, reliable and inexpensive energy technology. He also noted that Germany is Pakistan’s fourth-biggest trading partner, and the largest within the EU.

Trade between Germany and Pakistan totaled more than $2.5 billion in 2013. Commodities involved rice, leather goods and textiles from Pakistan and chemical products, machinery and motor vehicles from Germany.

By Andy Tully of Oilprice.com

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