At home Beijing is looking beyond coal, but abroad it’s investing in expansion of world’s dirtiest fuel
By Aamir Saeed in Islamabad
At a time when China is under intense international scrutiny for its coal-fired power projects and subsequent greenhouse gas emissions, the country is investing billions of dollars in Pakistan’s coal power projects.
Chinese banks and state-run companies like Power Construction Corp of China Ltd will finance two separate coal-fired power projects in Pakistan – 660 megawatts Thar coal project and 1,320 megawatts projects near Pakistan’s port city Karachi – worth US$4.15 billion.
Pakistan faces a year-round electricity crisis which rises to over 6,000 megawatts in summer. The government is planning to bridge the shortfall by building coal-fired power plants with help of foreign investment, especially from China.
These projects are part of a broad bilateral deal called as China-Pak Economic Corridor under which the Chinese government and banks will finance Chinese companies to invest $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years.
The 660 megawatts Thar coal power project will cost $2.05 billion that is being undertaken by a Pakistani private company, Engro Powergen, with help of the Sindh provincial government and financing from Chinese banks. It will be run on indigenous resources of coal.
Shamsuddin A. Shaikh, Chief Executive Officer of Engro Powergen, told RTCC in an interview the project has been divided into two parts – coal mining and power generation.
The mining will cost $950 million while $1.1 billion will be required for power generation for the 660 megawatts coal-fired power project, he said.
Giving details, he said that China will give $200 million out of $950 million for the mining and it will finance $625 million out of $1.1 billion for the power generation.
The remaining amount will be raised through Pakistanis banks with help of Sindh provincial government, he said, adding the project will be completed by second quarter of 2018.
“We are using the world’s best technology for the project and following World Bank standards on greenhouse gas emissions,” he said, “we are working hard to keep the carbon emissions from the project as low as we can.”
Shaikh said the project is being done in a remote area of Pakistan’s Sindh province and would have minimal environmental hazards on ecology of the area even in case of any accident or mishap.
“We are buying boiler technology from European countries while rest of all technology will be supplied by China,” he said.
According to government data, Pakistan has coal resources of more than 185.5 billion tonnes. If half of these resources were exploited, it would be enough to generate 100,000 megawatts of electricity for 30 years.
The 1,320 megawatts coal-fired power plant, known as Port Qasism Power Project, near Karachi will be jointly carried out by Chinese Power Construction Corp with 51% and Qatar’s Al Mirqab Capital with 49% stakes in the project with a total cost of $2.1 billion.
It will use imported coal from Indonesia and be completed by December 2018.
Interestingly, Pakistan’s government and local experts on environment and renewable energy support the coal-based power projects despite knowing all their hazards as they believe the schemes would help allay energy crisis in the country.
Mushahid Ullah Khan, Federal Minister for Climate Change, told RTCC that over 40% of the total world’s energy needs are being fulfilled through the coal and Pakistan’s share in it so far is almost negligible.
“The developed countries should help Pakistan buy clean-technology from the international market instead of just raising hue and cry over the coal projects,” he said.
The minister said the rich countries should help the poor countries overcome their problems like energy crisis as just lecturing is not going to help anyone deal with increasing challenge of climate change and its subsequent impacts on the whole world.
Dr Qamar-uz-Zaman, a leading expert on environment and climate change, is of the view the government is under intense public pressure to end energy crisis; therefore it is focusing on the coal-fired power projects.
“The government should be aware of the fact that some restrictions on coal-based power projects can be imposed in the upcoming Paris deal on climate change,” he said, advising the government to focus on long-term and clean power resources like hydro, solar and wind.
He said the international community can impose a carbon tax on exports of Pakistan if it goes ahead with its coal-based power plants and increases its carbon emissions instead of decreasing them.
The developed and rich countries should also allocate sufficient resources to extend financial help to poor countries like Pakistan overcome their increasing problems like mitigation, adaptation and energy crisis if they really want to deal with the menace, he suggested.