The government has decided not to relocate a 300-MW coal-fired power plant from Gwadar to Thar and has agreed to a three-year extension in its financial close.
Chinese leadership told Prime Minister Shehbaz Sharif during his recent visit to Beijing that relocating the coal-fired power plant from Gwadar to Thar would require a new project, which Beijing is unwilling to undertake because it has no intention to begin any new coal project, reported Business Recorder.
The Chinese Ministry of Foreign Affairs sought written assurances from Islamabad that the latter would honor any commitments made by the Prime Minister with the Chinese leadership.
At a recent meeting presided over by Planning Minister Ahsan Iqbal, it was disclosed that all major CPEC projects in Gwadar and surrounding areas, including New Gwadar International Airport, desalination plants, Pakistan-China Friendship Hospital, Pakistan-China Technical and Vocational Training Complex, and planned projects such as Gwadar Oil Refinery and Gwadar Shipyard, have a total power requirement of more than 800 MW.
In this context, the relocation of the project to Thar, as well as the use of local coal, is not viable due to long logistic lines and a cost-benefit analysis, which includes poor yield, high volatility, frangibility, and other environmental concerns associated with local coal.
Moreover, it was indicated at the time that shifting an approved project is against Chinese policy because no new coal projects can be developed or financed. The current project is being developed in accordance with Gwadar’s strategic objectives and the Gwadar Smart Port City Master Plan.
The project is a priority project under the CPEC Energy Agreement and will take 30 months to complete. It aims to improve the reliability of the local power supply, which will aid in the gradual resolution of problems in the ongoing economic development and urbanization of the Gwadar Free Zone.
