German firm ventures into power project in Pakistan

21 June 2007 – Pakistan’s top motorcycle manufacturer and a leading German diesel engine provider have agreed to set up a commercial power plant in the country’s central Punjab province to produce 450 MW.

Atlas Honda Limited of Pakistan and MAN Diesel Group of Germany will build the electricity generation unit near the city of Shiekhupura, 75 kilometres west of the Punjab capital Lahore, in two phases.

The project’s first phase, costing $260 m, is likely to be commissioned by March 2009 with percentage investment by Atlas Honda and MAN Diesel standing at 60 per cent and 40 per cent.

Reyhofen said liberal and investment-friendly policies pursued by the government in Islamabad encouraged his firm to enter into the joint venture.
Meanwhile, the two companies also signed a separate agreement under which MAN diesel would supply electrical equipment, mostly generators, with combined output of 1000 MW.

Pakistan is facing its worst-ever energy crisis, with electricity demand exceeding the supply by 2900 MW. Prolonged power cuts also have triggered violent protest demonstrations across the country.