Pakistan to Request Chinese IPPs to Use Domestic Coal
Pakistan aims to persuade Chinese independent power producers (IPPs) to switch from imported coal to coal from the Thar region. The Power Minister, Awais Leghari, disclosed this plan during upcoming talks between the two nations. The move is part of structural reforms suggested by the IMF, following a $7 billion bailout agreement with Pakistan.
By transitioning to local coal, Pakistan could reduce its energy costs significantly, benefiting both the country and Chinese-owned IPPs. This change may save Pakistan over Rs200 billion a year in imports, leading to a potential decrease in electricity prices. The government also plans to address issues like power theft and distribution losses, aiming to reduce circular debt in the power sector.
As Pakistan seeks to improve its energy sector sustainability, discussions with China may also involve re-profiling energy debt. The collaboration between the two countries could pave the way for a more efficient and cost-effective power generation system.
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