KESC plans to Setup Coal Fire Generators

At the moment when the world is looking to diversify its energy basket from coal and gas to nuclear, hydro and renewable, Pakistan is eying to add the coal fire generators to cope with the wide difference in the production and consumption of electricity in the country.

It is the Karachi Electric Supply Company (KESC) that is proposed to set two new coal fire generators (each of 500 MW) in Karachi – the coastal southern city of Pakistan.

The World Bank (WB), International Finance Corporation (IFC) and Asian Development Bank (ADB)  will provide finance for these power generation plants and the Pakistani government will provide sovereign guarantee for the loan. Federal Minister for Ministry of Privatization of Pakistan has given assurance to the KESC for the provision of finance in this regard. Senator Waqar Ahmed Khan, the federal minister for Privatisation has given firm assurance to the blue eyed management of the KESC that the government of Pakistan will provide a sovereign guarantee in this regard.

The government of Pakistan has privatized the KESC at a throw away price on the plea that the private management will add the power generation through its resources but the management has failed to do so and Karachi that is the business hub of Pakistan is facing the severe shortage of power supply as well as the industrialists have to pay high tariff that affected bitterly the cost of production and put their production incompetitive in the world market.

The proposed coal fire generators would run through the imported coal as the local reserves of the coal are not of required quality, the managing director of the KESC Naveed Ismail said.

It may be mentioned here that Pakistan has vast reserves in Lakhra and Thar. The Shenhua Group Corp of China made feasibility reports and had agreed for setting up a coal-fired power plants at Thar in the Pakistani province of Sindh. However, the Chinese group quit from the plan over the dispute of tariff. The project was expected to add 1,000 megawatts to the national power grid in three years

Due to various reasons and grounds, coal users in Pakistan have failed to utilize the local coal reserves. Pakistan’s cement industry will import just over 4 million tons of steam coal in 2010 from South Africa and Indonesia, up from around 3.7-3.8 million last year. The average rate of imported cement is about US$107 a ton CIF Karachi.

Pakistan is not blessed with large reserves of oil and the opportunity for the hydroelectric potential is confined to the northern region of the country. However, large deposits of coal were discovered at Thar over a decade ago by the Sindh Arid Zone Development Authority. In 1991, enormous coal deposits were conferred by the Geological Survey of Pakistan and the United States Agency for International Development.

Pakistan’s Thar Desert contains the largest coal reserves discovered to date, covering an area of 10,000 square kilometers. The Thar Coal Field, should it be developed, will yield over 200 billion ton of coal used to produce electricity, it will yield sufficient power to make Pakistan self-sufficient in Electrical power.Pakistan has reserves of natural gas, but these will start to diminish by 2010.

Since the discovery of Thar coal in 1991 very little development work or study has been initiated. Thar coal has low calorific value but is environmentally friendly with a low Sulfur content. The Thar coal deposits extend across the border and they are currently being mined for power generation in Rajistan in India. India has no reservations about the use of these coal deposits. Coal extraction from Thar will be a development requiring 3-4 years before coal is made available for use. The ideal situation would be that Government of Pakistan uses the coal to reduce Pakistan’s dependence on hydro projects, the only alternative method is to develop the Thar coal via international financing. This is possible only by inviting international power companies to invest in Pakistan and provide the required funding for the development of the Thar coal field.


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