Uncertainty Surrounds Long-Stalled Project Despite Previous Approvals
The future of the long-awaited Gwadar power plant continues to be shrouded in uncertainty, facing yet another hurdle after the previous Shehbaz Sharif administration greenlit the project for execution on imported coal. The 300-megawatt power project, part of the China Pakistan Economic Corridor (CPEC), has been plagued by delays since its listing as a “fast track project” in 2015.
Numerous challenges, including the Covid-19 pandemic, Pakistan’s economic struggles, and the overall slowdown in CPEC schemes, have hindered progress. Alternative proposals such as shifting to LNG, Thar coal, or even a solar plant have been discussed but ultimately shelved due to various constraints, including logistical difficulties and China’s stance against new coal projects.
Despite arguments to adhere to the original plan of using imported coal, the project has failed to achieve financial close. The National Electric Power Regulatory Authority (Nepra) recently revised the project’s cost and tariff, resulting in disagreements with the Chinese firm CIHC Pak Power Company (Pvt) Limited (CPPCL). CPPCL has sought significant increases in costs, raising concerns about the project’s viability.
Speculations are rife that the project may be shelved, especially with CPPCL’s request for a three-year extension on the Financial Close date. The caretaker government has formed an inter-ministerial committee to review progress and explore alternative power supply options for Gwadar if the project faces further delays.
Energy sector experts, including Dr. Khalid Waleed, caution against the reliance on imported coal due to potential global price shocks. However, from the sponsor’s perspective, the imported coal project offers simplicity and potential profitability through long-term contracts.
On the other hand, experts like Hanea Issad advocate for evidence-based decisions, suggesting a hybrid renewable option of solar-wind-storage could be the most cost-effective and reliable solution for Gwadar’s energy needs.
As the project hangs in the balance, the fate of the Gwadar power plant remains uncertain, with stakeholders at a crossroads between various fuel options and financial considerations. The decision on how to proceed will have significant implications for Gwadar’s energy landscape and its role in the ambitious CPEC initiative.
