After Germany, France raises concerns over challenges faced by its energy firms in Pakistan

After Germany and the United Kingdom, France has voiced concerns over the difficulties its energy firms are encountering in Pakistan, Business Recorder reported citing sources close to the Special Assistant to the Prime Minister (SAPM) on Power.

The Ministry of Foreign Affairs (MoFA) informed the SAPM on Power about a notification of a claim filed by Karim-ud-Din, owner of the Halmore power project. The claim alleges Pakistan’s breach of international obligations under the Bilateral Investment Treaty (BIT) and was filed through a Paris-based counsel.

The claim, addressed to the offices of the Prime Minister, the Deputy Prime Minister/Foreign Minister, and other high-ranking officials, invokes Article 8 of the 1994 investment agreement between Pakistan and the United Kingdom. 

Under this provision, disputes that remain unresolved after three months can be referred to international arbitration, including forums such as the International Centre for the Settlement of Investment Disputes (ICSID) or the United Nations Commission on International Trade Law (UNCITRAL).

At a bilateral meeting in Riyadh, French President Emmanuel Macron also discussed the matter with Prime Minister Shehbaz Sharif, who assured him of resolving the issues faced by French firms in the energy sector. 

Karim-ud-Din’s counsel, Banefatemi, has issued a written notification requesting settlement discussions under Article 8 of the BIT. If the dispute is not resolved amicably within three months, the matter may proceed to international arbitration. 

The notice also alleges coercion and discriminatory actions against Halmore, including threats to its CEO, placing the company’s future and the safety of its personnel at risk.

The MoFA has forwarded the notification to the Ministry of Commerce, the Board of Investment, and other relevant stakeholders for examination and appropriate action.

Sources said that Halmore and other privately owned Independent Power Producers (IPPs) have been targeted, while state-owned energy producers and Chinese-owned IPPs have not faced similar treatment. 

The German government had earlier raised issues regarding Rousch Power on behalf of Siemens, which have since been resolved. However, concerns raised by French firms and Halmore remain unaddressed.