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New energy policy means bonanza

By S Rahman

Pakistan People’s Party leadership has set a good record of taking difficult decisions for country’s better future as also evidenced now from the PPP-led government’s latest initiative of self-reliant energy policy by way of which thermal power plants would be operated on coal procured from Thar coal reserves. Of course, it was not an easy decision in the context of country’s squeezed financial resources as elaborated by Prime Minister Raja Pervaiz Ashraf himself while presiding over a recent meeting of Thar Coal and Energy Board at PM Secretariat the other day in which the request of Sindh government for modelling of two Jamshoro plants on coal source was not only accepted but also made the basis of switching the entire thermal generation industry to coal.

During this meeting, the prime minister admitted that, given the financial constraints, it was very difficult to give sovereign guarantees nevertheless he directed the Ministry of Finance to arrange sovereign guarantee for Sindh Engro Coal Mining Company (SECMC), a joint venture of Sindh government and Engro Power Generation, with the sole objective of starting work, without further delay, on coal-based generation. The first two projects include one existing 800MW unit and another new 600MW unit, both located in Jamshoro, Sindh. These two plants would be redesigned and designed, respectively, as per Thar coal specifications and this conversion would be financed by Asian Development Bank (ADB).

The prime minister has also directed the Ministry of Water and Power to get signed, within a week’s time (only two, three days left at the time of filing this article), a ‘coal off-take’ agreement between GENCO and SECMC that would further the process of aforementioned conversion.

Informatively, the SECMC and Engro Corporation are working on $1.3 billon integrated coal mining and power project in Thar area. The project covers mining of 6.5 million tonnes of coal and generation of1200 MW power. It is a matter of national pride to note that the Thar lignite (coal) resources of 175 billion tonnes constitute the sixth largest reserve in the world (however, total national coal reserves amount to 185.5 billion tonnes). For sure, these resources present an opportunity for development into a sustainable fossil fuel reserve that has the capability of meeting a large portion of Pakistan’s energy needs.

And, even if half of these resources are exploited properly, it would be sufficient for generating 100,000MW of electricity for 30 years at estimated consumption of 536 million tonnes of coal per year and to every Pakistani’s delight, energy contents of these resources are more than the energy contents of Saudi Arabia and Iran’s joint oil resources. Comparing it with Pakistan’s natural gas resource, the Thar coal resources are 68 times higher than the national gas reserves.

The government has girded up its loins and wants to take on the energy crisis with full forces, whatever the difficulties coming in the way. To quote PM Raja Pervaiz Ashraf, “History will not excuse us if we don’t take correct and timely decisions. Having huge coal reserves in the country that are henceforth being made the main resource of thermal power plants, it is now up to us to provide electricity to the people at affordable costs.” This is indeed commendable. The prime minister has rightly taken it as his moral, political and constitutional obligation to rescue the masses out of rampant energy crisis and out of the yet bigger curse of unaffordable cost of energy. In order to meet this target, the government has taken, and is further contemplating measures, for inviting more and more investment from the private sector, including the foreign investors for which all practical measures have been taken and incentives announced. These incentives include: completion of basic infrastructure of roads and water supply system; government guarantees vis-à-vis the performance of the power purchaser; government protection against political risks and changes in law and concessionary duties and taxes regime announced by Islamabad regime for the power sector and one-window facility provided at the federal level through Private Power & Infrastructure Board (PPIB) for power projects above 50MW.

These measures have borne fruit as Pakistan has been successful in attracting sizeable investment from private sector and according to solid calculations based on investment trends, the total figure is expected to touch the eight-to-nine billion dollars mark (or even more than that) in the near future. Certainly, it is the laying of foundation of an energy policy based on our indigenous resources, as claimed by the prime minister. And no one can differ with him when he says that this act alone would lead to saving of hefty foreign exchanges that would be spent on import of fossil fuel.

Taking all these measures into account, one is left with no choice other than agreeing in totality with Prime Minister Raja Pervaiz Ashraf: “It is laying of the foundation for sustainable socio-economic

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