China’s investment in Pak power sector reaches $21bn

ISLAMABAD: The Chinese investment in Pakistan’s power sector, under the umbrella of the China-Pakistan Economic Corridor (CPEC), has increased to $21 billion with the restoration of a powerhouse based on imported coal at Gwadar, a senior official of the Power Division told The News.

“Earlier, the government had almost abandoned the construction of a powerhouse based on imported coal at Gwadar, arguing it would not encourage more electricity generation on imported fuel and made a plan to set up a solar plant in its place. “But, later it suggested to the Chinese government to convert the power plant based on Thar coal. “The feasibility report did not favour employing Thar coal as the cost of transportation from Thar to Gwadar was found on the higher side. More importantly, the Chinese government refused to subscribe to Islamabad’s viewpoint and insisted on the restoration of the 300-MW powerhouse based on imported fuel.

“It termed the initiative the most strategic project, as the Gwadar port’s operation cannot be made dependent on any weak project, whose fuel transposition may be vulnerable given the law and order situation in the province and imported electricity from Iran as well.”

The official said: “Now we have restored the 300-MW project on imported coal, which will be made operational by December 2025.”

Given the run-down of the power sector projects, under the CPEC umbrella, the official said that eight projects worth $11.337 billion had already been commissioned and were injecting 7,320-MW electricity into the national grid.

In addition, under CPEC, one mega transmission line project, the Matiari-Lahore HVDC transmission line, had been completed at the cost of $1.658 billion to transport 4,000-MW from Sindh to Lahore to cater to the needs of the load centre of Punjab.

However, five projects worth $6 billion are under process to generate 4,328-MW power. Of these, the cost of Thar coal electricity project of 1,320-MW, which is part of IGCEP (Indicative Generation Capacity Expansion Plan 2022-31) is yet to be determined. If the estimated cost of the project is included, then the CPEC power sector projects cost would go up to $21 billion.

Private Power and Infrastructure Board (PPIB) Managing Director Shah Jahan Mirza also confirmed to The News that the Chinese investment in the power sector had increased to over $21 billion.

According to the latest figures available with The News, the eight projects which were functional include Sahiwal coal power plants of 1,320-MW, Port Qasim coal power project of 1,320-MW, Engro Thar coal power and mine project of 660-MW, HUBCO coal power project of 1,320-MW, Karot hydropower project of 720-MW, HUBCO Thar coal power plant of 330-MW, Thar coal Block-1 power generation project of 1,320-MW, and Thal Nova Thar coal power project of 330-MW.

The under process five projects include 884-MW Suki Kinari Hydropower project, which will become commercially functional by November 2024, and Gwadar coal power project of 300-MW will now be functional by December 2025. Azad Pattan Hydropower project of 700-MW will be completed and become functional by September 2030, Kohala project of 1,124-MW will become functional by March 2031. Thar electricity coal project of 1,320-MW at Block VI has also been included in CPEC, but its cost is yet to be finalised.