Pakistan power shortages; China comes to the rescue

Pakistan power shortages; China comes to the rescue

By Tom McGregor, freelancer based in Beijing

Pakistani Prime Minister Nawaz Sharif was elected in 2013 pledging to boost the nation’s GDP (Gross Domestic Product) growth rates. Sounds wonderful, but the country has been struggling with rampant power shortages amidst its pursuit of urbanization, infrastructure development and commercialization.Widespread blackouts have turned its cities back into the ‘Dark Ages.’

According to the World Bank Group’s latest ‘Global Economic Prospects’ report, Pakistan continues to have “strong service sector growth,” but severe energy shortages in January this year have hindered its development. Pakistan’s total installed power capacity stands at 20,000 MW (megawatts), which means supply regularly can’t meet demand especially in the summer. Yet, China sees opportunities to resolve the energy crunch.

Turning the lights on China Pakistan Economic Corridor

Beijing is supporting the US$ 46 billion China Pakistan Economic Corridor (CPEC) to create an energy and transportation hub for the two nations, which entails constructing roads & railways along with oil & gas pipelines through a 3,000 km corridor that connects the northwestern Chinese city of Kashgar with the southern Pakistani port city of Gwadar on the Arabian Sea.

Most projects are scheduled for completion in 2018. Chinese companies will be investing and building power plants in Pakistan to generate more electricity from coal, nuclear energy and hydropower. China also plans to run a fiber optic cable from the Xinjiang Uygur Autonomous Region to the Pakistani city, Rawalpindi.

“CPEC is a corridor of unity,” Pakistani Senator Mushahid Hussain, chairman of the Parliament of Pakistan’s Defense Committee, told Xinhua news agency. It’s “uniting the people of Pakistan … all the regions of Pakistan in a quest for prosperity through different projects.”

Coal as a unifying force

Despite environmental criticisms, coal is considered the most reliable and affordable energy source. Coal generates approximately 40 percent of global energy usage as reported by RTCC news. Pakistan holds about 185.5 billion tons of coal ready to be exploited. Even if just half of that coal is transferred into power capacity, it could generate 100,000 MW of electricity for the next 30 years.

Hence, China and Pakistan have engaged in major coal projects, such as the 1,320 MW coal plant under construction at Port Qasim near Karachi. Chinese Power Corp., with a 51 percent stake, signed on with Qatar’s Al Mirqab Capital, with a 49 percent stake, which imports Indonesian coal at a total cost of US$ 2.1 billion.

Meanwhile, the Thar coal project, costing US$ 2.05 billion, is led by Pakistani private company – Engro Powergen – with subsidies from the Sindh provincial government and financing from Chinese banks. It will be divided into two parts: mining, cost – US$ 905 million and electricity, cost – US$ 1.1 billion. The coal power plant is expected to generate 660 MW of electricity.

Pakistan sees value in renewables

Although Pakistan is making a major play on coal, Chinese clean coal technology equipment companies are helping them collaborate with global firms. When discussing the Thar coal project. CEO Shamsuddin A. Shaikh of Engro Powergen told RTCC, “We are using the world’s best technology and following the World Bank’s standards.”

He added, “We are buying boiler technologies from European countries while the rest of the technology will be supplied by China.”

Pakistani Environmental Minister Mushahid Ullah Khan explained that his country will rely more on coal, but suggested that “developed countries should help Pakistan buy clean technology from the international market, instead of just raising a hue and cry over the coal projects.”

Actually, CPEC (China Pakistan Economic Corridor) is demonstrating that Beijing is following such pragmatic advice. Chinese companies will invest in a series of renewables projects in the country, including solar and wind farms, as well as nuclear and hydropower plants.

Utilizing practical steps to resolve power shortages

Beijing is taking major steps forward to help Islamabad overcome its power shortages. Chinese companies and banks would benefit big-time, but so will the Pakistani people, as the nation’s power supply can rise above its demand. For the Pakistani economy to succeed, the country needs an abundance of reliable and cost-effective energy for its cities and factories. Accordingly, CPEC is coming to the rescue.