July 22, 2021 (MLN): Despite weak global trends and lack of triggers, Pakistan’s Power Sector has received the highest net FDI worth $906.1 million, up by 18% YoY during FY21, followed by the Oil & Gas Exploration sector and Financial Businesses with net FDI of $242.8mn and $235.5mn, respectively.
Similarly, in the month of June alone, the Power sector emerged as a major recipient of the foreign inflows, as it fetched a net $47.8mn, followed by the Oil & Gas Exploration and Social Services sector with net FDI of $30.7mn and $24.9mn, respectively.
According to the cumulative data released by the State Bank of Pakistan (SBP) on total Foreign Investment received by sectors, Coal Power projects under Power Segment attracted the most of investors’ attention as it received the highest net inflows of $511.9mn during FY21 compared to the net inflows of $545mn in FY20, down by 6% YoY. This was followed by Hydel Power Projects which attracted a net FDI of $199.5mn during FY21 as against $148.2mn in the previous fiscal year, marking an increase of 35% YoY.
The detailed analysis revealed that the second sector with higher net flows in Pakistan is Oil & Gas Exploration sector. During FY21, the sector fetched 22% lower investment when compared with the net investment of $311.4mn in FY20.
The third-highest net FDI receiver is the Financial Business sector with net inflows of $235.5mn during the FY21, showing a decline of 14% YoY as the sector observed $274.8mn net foreign inflows in FY20.
The next in line is the Trade sector which fetched a net of $142.2mn, compared with the net investment of $43.2mn net in FY20, depicting a whopping increase of 229% YoY.
Furthermore, the Electrical Machinery sector received net inflows of $114.3mn against $153.4mn reported in FY20.
Other sectors such as Communication attracted $99.8mn, down by 85% YoY. Meanwhile, Social Services, and Electronics, also managed to fetch decent investments worth $99.8mn, $34.9mn, and $33.4mn million respectively during FY21.
Moreover, the other sectors that saw notable foreign disinvestment during the period include Transport (-$73mn), Petroleum Refining (-$60.4mn), and Mining & Quarrying (-$23mn).
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