Berlin - German Chancellor Angela Merkel called on Islamabad to step up reforms to help boost foreign investment in Pakistan and to improve the security problems facing the South Asian state.

“The economic relations (between Germany and Pakistan) can be widened,” Merkel said at joint a press conference in Berlin with Prime Minister Nawaz Sharif.

“We can look at intensifying these (investments), as long as the conditions are right,” she said.

But she also acknowledged that security threats in Pakistan remained an obstacle to foreign companies investing in the nation.

Germany is looking to increase its investment in Pakistan’s energy sector, provided companies are reassured about the security situation , Merkel said and added Germany’s KfW state development bank was already involved in projects in Pakistan including hydro power plants, but added that the security situation was sometimes a deterrent.

“It is important that the prime minister is successful in improving the security situation and the legal system so that investors feel safe,” said Merkel, adding that the agricultural sector also offered opportunities. The chancellor said it was important that Nawaz‘s government pressed on with its efforts aimed at boosting security measures and creating better conditions to encourage investment, in particular in the energy sector as well as agriculture and environmental technology.

“I hope that we can create a climate that is friendly for investors,” said Merkel.

The press conference followed talks between the chancellor and Nawaz Sharif in her Berlin office on a range of issues including the fight against terrorism.

Sharif urged German firms to invest in his country. “Pakistan is facing an acute shortage of energy,” he said.

“We believe in the next three years we should be able to have at least additional capacity of about 4-5,000 megawatts of electricity,” he said adding that would increase further in the longer term.

Sharif said German firms, some of them world leaders in renewable energy technology thanks to the country’s shift to green energy and away from nuclear power, were keen to invest.

Germany is Pakistan’s fourth-biggest trading partner, and the largest within the European Union, Sharif said.

Bilateral trade totalled about 1.9 billion euros last year with Pakistan selling mainly textiles, leather goods and basmati rice to Germany while Germany exports predominantly chemical products, machines and vehicles to Pakistan.

Sharif said Germany has pledged to improve its economic ties with Pakistan and cooperate in the energy sector.

“There is a lot of interest of German businessmen to invest in energy sector in Pakistan as the country is facing acute shortage of energy and the government is aggressively pursuing the policy to attract foreign investors,” the PM said. He said they held a productive meeting with special focus on bilateral relations. He said both sides exchanged useful views on regional and global issues. He said Germany occupies a special place in Pakistan’s foreign policy and both Pakistan and Germany enjoy traditionally warm and friendly ties.

“Pakistan offers the most investors friendly climate when compared in the world today and the German businesses can benefit from it, by participating in multiple sectors of our economy,” Sharif said, adding Pakistan’s energy sector in particular is lacking large investment.

Sharif welcomed the decision of German government for establishing an Energy Forum in Lahore and also its decision to cooperate in water disaster management.

“We will overcome terrorism at all costs,” Nawaz told the press conference.

Nawaz, who was greeted in Berlin with full military honours, told Afghan President Ghani before his departure for Germany that he supports his call for peace talks.

Merkel also confirmed that Germany will remain involved in Afghanistan even after the end of the NATO combat mission in the country on December 31.

The German army, the Bundeswehr, is part of the NATO mission and plans to retain a maximum of about 800 soldiers in a military education operation in Afghanistan.

“We want as much as you do that what has been achieved in Afghanistan is not threatened,” Merkel said. “A stable Afghanistan is in the best interest of Pakistan.”

Replying to a question, Sharif said scourge of terrorism continues to haunt the world, adding Pakistan is still paying forbiddingly a heavy price in fighting this menace.

He expressed the confidence that Pakistan will soon succeed in defeating this menace.

Sharif said both the countries have mutually agreed to further strengthen their ongoing engagement in the field of counter terrorism. Germany has played an important role in development of Pakistan’s social sector, he said, adding both the countries have also decided to continue their collaboration in the field of higher education.

He said both the countries have rich culture and Pakistan greatly values the decision of German government to sponsor its archaeological sites and to preserve UNESCO heritage site at Makkali.

Sharif appreciated the German government’s decision of expanding its ongoing vocational training programme in Pakistan. He said that rapidly transforming global scenario poses serious challenges as well as exciting opportunities. “I believe in the concept of a peaceful neighbourhood while promoting cooperation, co-existence and connectivity,” he added.

He thanked Chancellor Merkel and the German government for their consistent and sincere support to Pakistan.

The prime minister also invited the German Chancellor to visit Pakistan.

To a question, the PM said that Nobel laureate Malala Yousufzai is not only regarded as a hero in Pakistan, but also is very popular in the country for her service in the field of education.

He said Malala has gone through hard times but thanks God, she survived. The PM said the peoples of Pakistan and Germany are equally rejoiced over the way Malala was honoured with the award.

The PM said he hasn’t come across any adverse feeling against Malala in Pakistan even in Swat. She is being respected by entire Pakistan, he added. About killing of a Christian couple in Pakistan, he said, it is a shameful act and we condemned it. He said a judicial inquiry has been ordered and instructions had been issued that the accused be given exemplary punishment.

Lauding Nobel Laureate Malala Yousufzai, the German Chancellor said that girls like Malala who is courageous and brave, are pride for Pakistan. She also congratulated the Prime Minister and Pakistani nation on Malala’s winning the Nobel prize.