Pakistan may offer RLNG power plants’ stakes to NRPs

KARACHI: Pakistan is considering offering significant stakes of its wholly owned regasified liquid natural gas (RLNG) plants to overseas Pakistanis to attract additional foreign exchange inflows, a senior industry official said on Thursday. 

“We suggested the sale of state-owned power producers to non-resident Pakistanis (NRPs) to the government for bridging the current account deficit, and the proposal is under consideration,” Arif Habib, chief executive officer at Arif Habib Corp, said. 

“It was also proposed to effect growth in remittances through routing all inward flows via banking channels by means of increase in incentives, raising dollar deposits from friendly countries, and announcing amnesty scheme whereby no questions would be asked from people who bring their wealth back to the country and pay a fixed amount of tax.” 

Habib added that Pakistan would exhaust all available options before going to International Monetary Fund (IMF) after general elections as the multilateral lender generally recommended unpopular measures like increase in tax rates, inflation, and devaluation of currency. 

According to the proposal, 49 percent stake in the Rs200 billion RLNG power plants - being developed out of the public sector development program (PSDP) – will be offered to overseas Pakistanis either through a fund or initial public offering (IPO).

The remaining 51 percent will be sold to strategic investors whether local or foreign, but against US dollars. 

CEO Arif Habib Corp said overseas Pakistanis had abandoned liquidity and this money was away from Pakistan because of limited investment options. “The offering could generate $2.0 billion along with the premium through this offer,” he said.

The government has plans to privatise the public sector RLNG power plants having a cumulative capacity of 2400 megawatts in Punjab and the offer is likely to come in the first quarter of 2018.

Overseas Pakistanis remit around $20 billion a year while around $7-8 billion comes through informal channels, while they have almost only invested in the real estate.

Analysts estimate that an equal size of money is pooled with the overseas Pakistanis and that capital can be brought to the country through reliable investment opportunities.