Pakistan’s Finance Minister Muhammad Aurangzeb and Energy Minister Owais Leghari recently visited China. During their visit, they saw significant progress in making current coal power plants operational on imported coal. This is a huge step for the country as it tries to deal with expensive electricity.
Shifting to Local Coal
China has approved three major power plants to shift from imported coal to local coal which are:
- Sahiwal Coal Power Plant – 1320 MW
- Hub Power Plant – 1320 MW
- Port Qasim Power Plant – 1320 MW
These plants are among Pakistan’s most expensive electricity producers. Elevated electricity prices have weighed heavily on both consumers and the economy, largely in part because of the high cost associated with importing fuel like gas and oil, but mainly coal, from abroad. By using domestic sources such as these new ones found here, costs are expected to come down significantly, thus making power more affordable while stabilizing the energy sector.
Re-profiling of Power Plants
In addition to allowing for local coal consumption, Chinese authorities have also shown a willingness to re-profile these three plants. These modifications will be made so that they can operate better with locally sourced fuel, thereby ensuring sustainable efficiency gains over their lifetime. Hence, this move would enhance the overall performance of these facilities.
Support for Panda Bonds
China promised full support during these talks regarding issuance of panda bonds by other nations besides itself; according to some experts representing different countries who were there too, agreed upon one thing unanimously, i.e., without any doubt whatsoever, it was said loudly & clearly once again till now always shall forever remain true: if there ever was an alternative financing option capable enough priority given importance highest levels possible could happen only when we talk about those issued outside mainland China since such steps provide more excellent opportunities not just for raising funds required but also managing debt effectively within available means through better coordination between financial systems globally, especially during periods characterized by increased demand volume levels requiring huge investments like these presented here today.
Context and Crisis
The Pakistani minister’s visit to China coincides with the country’s acute power crisis. This situation has been worsened by high-capacity payments made toward IPPs (Independent Power Producers). The government has to pay a fixed amount for each unit, whether it generates electricity or not, leading them into financial difficulties.
These meetings are part of Pakistan’s ongoing efforts. China to address conversion, re-profiling issues, and other related matters in this sector.
