At the centre of Asian growth, Pakistan is becoming Asia’s trade, energy and transport corridor. Pakistan has the potential to become one of Asia’s premier trade, energy and transport corridor. Geographical location suits transit trade with proximity to the Middle-East, West Asia, Central Asia, China and South Asia. Recent developments to realise this vision include Gawadar port, located at the Strait of Hormuz, to be linked by road & rail to Afghanistan, Iran and China and onwards to Central Asia, Middle East.
Pakistan has a liberal investment policy and gives equal treatment of local & foreign investors. All economic sectors are open to foreign investors and foreign equity up to 100% is allowed. No Government permissions are required and remittance of capital, profits, royalty, technical & franchise fee is allowed. Import of raw material for export manufacturing is zero-rated. Protection of foreign investors is ensured through the Foreign Private Investment (Promotion & Protection) Act 1976 and Protection of Economic Reforms Act 1992.
Investment opportunities in agriculture
- Farm equipment/machinery & pressurized irrigation systems
- Commercial production of olives, edible oil seeds, tea, herbs and cut flowers
- Certified seed incl. hybrid/BT seeds & nursery production
- Silos/warehouse storages (30-35 million tonnes)
- Absence of wholesale markets and commodity exchanges
Investment opportunities in livestock
- Commercial dairy farming/processing plants
- Establishment of modern slaughter/abattoirs
- Dedicated livestock farms and calf fattening for halal meat production
- Sheep goat rearing for Hajj
- Camel breeding farms
- Veterinary & lab services
- Feed mills & fodder production
- Silage facilities
- Cool chains
Investment opportunities in textiles
Pakistan is the 4th largest cotton producer and 3rd largest cotton consumer. This sector is the main driver of export for the last 50 years. There has been investment of $7.5 billion over the last 10 years.
Incentives:
• Availability of internationally acclaimed raw cotton
• Dedicated textile and Garment ‘Cities’
• Reduction of import duty to 5% on textile machinery and parts and ginning presses
• Research and Development (R &D) support of 6%
• Turnover tax reduced to 1% and sales tax reduced to 2%
Land is available at Karachi Garment City, Lahore Garment City and Faisalabad Garment City to develop the following industries:
• Light engineering factories
• Textile industries
• Garments industries
• Ginning factories
• Power looms
• Carpet industry
Investment opportunities in energy
Pakistan’s coal reserves:
Sindh: 186.560 billion tonnes
Punjab: 235 million tonnes
Balochistan: 217 million tonnes
KPK: 90 million tonnes
Azad Kashmir: 9 million tonnes
Overview of Thar coal:
Total Lignite coal reserves: 185 billion tonnes. Pakistan is 7th richest coal nation in the world. Thar Lignite coal reserves:175 billion tonnes spread over 9100 sq. km. Generation potential 100,000 MW consuming 536 million tonnes/year.
Total reserve is equivalent to 50 billion tonne of oil (more than Iran & Saudi Arabia combined oil reserves) or over 2000 TCF of gas (42 times greater than total gas reserves discovered in Pakistan so far).
Infrastructure at Thar:
Road network: Available up to coalfield
Electricity: Available up to coalfield
Communication: Fibre-optic line available up to coalfield
Reverse osmosis plants: Established near coalfield
Thar Lodge: 20 rooms accommodation along with dormitories to facilitate foreign and local investors under progress
Incentives:
• 20% IRR to firms which achieve financial close before December 31, 2015 for power plants based on indigenous coal and an additional half a percentage IRR i.e. 20.5% IRR for firms which achieve financial close by 2014
• Thirty years exemption on corporate tax and minimum turnover tax to mine & power plant operators from the date of first sale as available to IPPs
• All custom duties on import of coal mining projects allowed at zero% to reduce the initial capital investment
• Exemption on withholding tax to shareholder on dividend for initial 30 years to improve risk return profile for the initial projects
• Exemption for 30 years on withholding tax on procurement of goods and services during project construction and operations to reduce the initial capital investment
• Exemption for 30 years on other levies including special excise duty federal excise duty, WPPF and WWF to reduce initial capital investment
• Thar coalfield be declared as Special Economic Zone, and shall be declared as ‘Projects of National Security’
• Coal-based power projects and coal mining projects in Sindh shall have the same incentives, concessions, protections and security package as that available to IPPs developed pursuant to Power Generation Policy 2002 (as amended from time to time).
Opportunities in:
Hydel:
- Water storage/irrigation network
- Conjunctive hydro power generation
- Run of the river
- Low head hydels
- Integrated CBM/coal & power generation project
- Renewable energy generation
- PPP on BOO & BOOT basis
- Incentivised packages for investment with security/protection arrangements
Opportunities in oil & gas:
Pakistan can be a likely hub for E&P activities and become an energy corridor in the region. Pakistan is a gas prone country after making a commercial discovery; the lead time to develop the gas field is 3-5 years depending on terrain and infrastructure. Petroleum Policy 2009 has been promulgated where in further incentives have been provided to attract local and multi-national companies for investment in oil/gas sector of Pakistan
— Courtesy Board of Investment, Government of Pakistan