ISLAMABAD – Pakistan’s chronic problem of excess electricity generation, which has long burdened the economy with capacity payments nearing Rs2 trillion annually, could be transformed into a strategic advantage. Experts suggest that the country’s surplus power can be redirected towards establishing artificial intelligence (AI) parks and data centres—turning a costly surplus into a valuable export.
Consumers currently pay for unused megawatts, while globally, there’s a growing shortage of affordable and reliable energy to power AI training models, data centres, and other digital infrastructure. Pakistan, with its untapped energy potential, stands at the crossroads of opportunity.
Analysts propose creating AI parks that can host large digital load (LDL) campuses near underutilised power plants, especially those located along the coast and connected to submarine cables. Such initiatives could trigger a “digital renaissance,” positioning Pakistan as a global compute exporter while easing domestic capacity payment pressures.
Power demand for data infrastructure is skyrocketing across the US and Europe, where power prices hover between 12 to 18 cents per kWh—almost double Pakistan’s marginal cost of around 6 cents near coastal regions. With over 4,000 MW of surplus capacity in the country’s southern belt, experts argue that this energy can be channelled into power-intensive industries like AI and data processing.
However, the window of opportunity is narrow. As solar energy adoption increases and battery storage becomes cheaper, grid demand is declining, creating risks of a “grid death spiral.” Experts warn that delaying firm demand creation could cause fiscal strain that taxpayers would eventually bear.
Read More: Book on Meezan Bank’s Journey ‘Unconventional – The Bank No One Saw Coming’ Launched in Karachi
A proposed AI park in the Karachi-Hub-Jamshoro region, home to more than 3,000 MW of power capacity and strong submarine connectivity, could serve as a flagship project for this initiative. It would also circumvent north-south transmission constraints and attract foreign investment by offering globally competitive power rates.
To make this vision a reality, policymakers must act swiftly. Regulatory clarity is essential, including defining a new LDL consumer category, determining fair use-of-system charges, and ensuring that the Competitive Trading Bilateral Contracts Market functions effectively.
Additionally, Pakistan must strengthen its Personal Data Protection laws and distinguish AI parks from telecom services, recognising them as critical information infrastructure. Removing barriers to equipment imports and ensuring dividend repatriation are also crucial to attract foreign direct investment.
Experts stress that time is of the essence. Delays or bureaucratic bottlenecks could turn another potential success story into a costly policy failure—leaving taxpayers to bear the burden once again.
The writer is an assistant professor of practice at IBA, member of the Thar Coal Energy Board, and CEO of NCGCL.