Pakistan May Save $3.24 Billion by Shifting Jamshoro Plant to Thar Coal

Pakistan could save an estimated $3.239 billion over the next 26 years by converting the Jamshoro Unit 01 power plant from imported coal to locally produced Thar lignite, according to the Ministry of Energy.

A feasibility study prepared by Dornier Group and EY Parthenon found the project to be technically feasible, economically viable, and environmentally manageable. The conversion is expected to generate foreign exchange savings of $2.113 billion by reducing dependence on imported coal.

The study estimates total net benefits of $3.239 billion over the project’s life, including $1.720 billion in power sector gains and $1.519 billion in government savings through lower interest costs on foreign borrowing. The project has a cost benefit ratio of 1.8 and remains financially attractive under different scenarios.

Converting the plant will require targeted engineering modifications instead of a complete boiler replacement, helping preserve the value of the existing ultra supercritical facility. Capital expenditure for the conversion is estimated at $86.2 million, while the total project cost stands at $116.6 million.

Power Minister Sardar Awais Ahmed Khan Leghari was briefed on the study, which was prepared with support from K Electric, Jamshoro Power Company Limited, and the Private Power and Infrastructure Board. A steering committee held 38 meetings to oversee the study, including 15 chaired by the minister.

The initiative forms part of the Prime Minister’s Power Sector Reform Plan and is aimed at increasing the use of domestic energy resources. Officials said the switch to Thar lignite would support mine expansion in Tharparkar, create jobs, and improve infrastructure in the region while reducing exposure to fluctuations in global coal prices and exchange rates.

The government will now move toward implementation by seeking policy approvals, engaging lenders, obtaining regulatory clearances, and preparing design verification and plant modification plans.