ISLAMABAD, March 8: Two major power companies of the US and the UK - AES Corporation and Globeleq - have offered to invest $2 billion in Pakistan's power sector in the near future.

Water and Power Minister Liaquat Ali Jatoi told a news conference here that in overall terms Pakistan would attract at least $8 billion investment in the power sector over the next 8-10 years.

He said AES of the US had sent its interest in writing on Tuesday to invest $1 billion for generating a coal-based 1,000-mw energy project at Thar. Similarly, Globeleq, a public power sector player of the UK, has also shown interest in investing $1 billion in the power sector.

Both the companies would also be participating in the international competitive bidding (ICB) of three thermal plants in Uch, Faisalabad and Lahore, with a total capacity of 1,400mw in the next few weeks.

Mr Jatoi said a timeframe for the bidding would be announced by the end of this month. He said the government had chalked out a strategy to install power projects of 7,500mw with a total investment of around $8 billion in the next 8-10 years to combat looming power shortages and meet growing economic demand.

The minister said Pakistan had received a tremendous response from foreign investors during the two road shows held in Dubai and London recently. He said the government had also received very encouraging response from international power companies for the investment in small to medium hydel power projects with a total capacity of about 1,800mw and an estimated investment of $2.25 billion.

These projects include 115mw Sharmai, 655mw Suki Kinari, 130mw Patrind in NWFP and 245mw Mahl and 53mw Harighel power project in Azad Kashmir. Mr Jatoi said the international companies had also expressed their interest in developing five coal-based projects - two each in Thar and Sonda-Jherruk, and one in Lakhra.

Pakistan marketed three projects - 400-500mw Uch-II power project based on low BTU gas, 450mw Faisalabad dual-fuel (gas/oil) power project, and 350-400mw Lahore dual-fuel power project.

He said to attract an investment of about $1.3 billion for these three projects, investors would come to Pakistan. The minister said that some of the potential investors participated in the road shows included General Electric (USA), Globeleq (UK), International Power (UK), AES (USA), Wartsila, Bestway (UK), Marubeni (Japan), Mitsui (Japan), Al-Ghorair (UAE), Emmar (UAE), Al-Fotaim (UAE), Bin-Zayed Group (UAE), National Power (UK), Actis (UK), Brazil Energy, Standard Charted Bank, Shell, Fauji Foundation, Saigol, Descon, Ibrahim Group, Sapphire and Rupali.

About one of the most important projects, Neelum-Jehlum Hydropower Project of 969-mw of electricity to be set up at a cost of $1.5 billion, the minister said the process of international bidding for the project would be completed by April 30, 2005.

Mr Jatoi said Pakistan had a surplus of 2,275mw of electricity at present and succeeded in averting the load-shedding in the country in the peak demand despite low water availability. He said the country had about 2.439 million acre feet of stored water as of today as compared to 0.079maf the same period last year.

The minister said that corporatization of the power sector would be completed as early as possible and added that after the completion of the corporatization process it would be easy to regulate finances of the unbundled companies. He said a chartered accountant would be appointed to maintain the financial discipline in these entities. He also said that the margin of profitability in the power sector stood at 50-60 per cent.

In reply to a question about the expenses incurred on the holding of road shows, the minister said that both the road shows were sponsored by local and foreign companies.