Energy The crisis-stricken Pakistani government will be working in the country this month Chinese Imported from power plants Coal It will request to use the local coal of Pakistan’s Thar instead.
Owais Leghari, head of the power division of the energy ministry, told Reuters that officials may also begin discussions with Beijing on the re-profiling of Pakistan’s energy sector debt during his visit to China.
Owais Leghari will also be part of a delegation to discuss fundamental reforms in the power sector structure proposed by the International Monetary Fund (IMF), which last week approved a new and extensive bailout of $7 billion for Pakistan. The program was agreed upon.
Neighboring China has invested more than 20 billion dollars in energy projects in Pakistan.
The Federal Minister said that one of the main objectives to move forward on the agenda is to convert our imported coal-fired units to local coal. This will have a huge impact on energy, electricity prices in the near future.’
Such a transfer would benefit Chinese-owned plants in Pakistan by easing pressure on Islamabad’s foreign exchange reserves, offering easier return of profits and better returns in dollar terms, he said.
Owais Leghari said that the transfer would save Pakistan more than 200 billion rupees ($700 million) annually in imports, which could reduce the cost of electricity by 2.5 rupees per unit.
In April, a subsidiary of Engro had agreed to sell all its thermal assets, including the sale of Sindh Engro Coal Mining to Pakistan Liberty Power. Liberty said the decision was made based on Pakistan’s lack of foreign exchange and the potential of its domestic coal reserves.
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However, on this occasion, the federal minister refused to elaborate on the possible talks with China on the re-profiling of energy sector loans.
Pakistan’s power sector has been plagued by high rates of power theft and distribution losses resulting in endless debt accumulation and has been a concern of the IMF.
Owais Leghari said that the government is implementing reforms in the structure of the sector to reduce ‘circular debt’. This endless cycle of loans has reached 100 billion rupees in a year.
The country’s poor and middle-class households have been hit by the IMF bailout last year, which has increased electricity rates.
Pakistan’s annual electricity consumption is expected to decline steadily for the first time in 16 years as high tariffs deter domestic consumers from using electricity despite record summer temperatures.
Owais Leghari said: ‘We have seen a downward trend in power demand in the last year or a year and a half and we are expecting this to continue until we rationalize the price of power.’
He further said that the biggest challenge of the government was to stop the demand from shrinking.
He said that since the per unit tariff for electricity is more expensive, both urban and rural consumers are now moving towards alternative sources like solar.
According to him: ‘Currently we have about 1,000 megawatts of solar power available on the grid in the form of net metering systems and other sources. This is a very conservative estimate as the on-grid (solar share) may be five to six times higher than that currently.
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2024-07-23 06:56:56
