Talking to the delegation of Thar Coal Block-I Power Generation Co led by its CEO Meng Donghai CM Sindh said that the coal mining work had been completed by 40% and he would visit the project by the end of this month.
The delegation members include Sino-Sindh Resources Ltd (SSRL) CEO Li Jigen, Deputy CEO Huang Jinting and Deputy CEO Chaudhary Qayyum. Sindh Energy Minister Imtiaz Shaikh, Principal Secretary Sajid Jamal Abro and Sindh Energy Secretary Tariq Shah were amongst the attendees.
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Mr Donghai briefed the CM regarding the developments and informed him that over 40pc mining work had been completed while work on the power plant was also in progress. He further revealed that the mining work would be completed by the end of 2021 and the first unit of power plant would also start working from 2022. The entire project would hopefully be completed by 2023, he added.
CM Sindh equated the success of the Thar Coal Block Mining-1 to the success of his government. He said that his government had worked hard day and night to materialize coal mining and power projects in Thar and he is happy that they have been completed successfully.
The visiting delegation also requested the CM to resolve their water issue. They said that water being drilled out from the mine needed to be disposed of somewhere and the water was also required for the power plant at Block-I. CM Sindh also urged the delegation to resettle the displaced people of Block 1 to which the CEO said that the process of getting them resettled has already been started.
Earlier, CM Sindh Murad Ali Shah had said that said that the utilization of indigenous Thar Coal instead of imported coal for power generation has resulted in a saving of $78 million FOREX for Pakistan.
Pakistan’s energy needs exceed its energy supply
During the period 2008-2010, with a rising population and an expanding economy, Pakistan’s energy needs have outpaced its national energy supply. Exacerbating the demand-supply gap was Pakistan’s unsustainable power generation fuel mix, which contained a high share of oil-based power generation up to 32%, resulting in a high cost of electricity production.
Moreover, there was, and still is, a heavy reliance on imported fuels which result in constant depletion of foreign exchange and insufficient control over the fuels supply chain. This inappropriate fuel-mix leads to energy losses at each level of the value chain and inadequate recoveries leads to power outages, unaffordable electricity and the circular debt.
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It was, therefore, important for Pakistan to develop its own indigenous fuel sources which would allow the country to produce economical, abundant, affordable and reliable energy – thus the case for Thar coal projects came into the context of the country’s energy scenario.
Thar Coal Mining Project-Addressing Pakistan’s energy crisis
To provide incentives for the development of local coal and encourage mining and power projects in the region, the Govt. of Pakistan through the ECC approved a number of incentives for such projects in October 2010. These included declaring Thar Coalfield a Special Economic Zone & approving the provision of sovereign guarantee for the debt portion of the mining project of up to USD 700m with the condition that GoS shall hold the majority shareholding in the project.
The Thar Coal Mining project has been undertaken by Sindh Engro Coal Mining Company (SECMC) – a Joint Venture Agreement (JVA) between Government of Sindh (GoS), Engro Energy Limited (formerly Engro Powergen Limited) and its Partners namely; Thal Limited (House of Habib), Habib Bank Limited (HBL), Hub Power Company (HUBCO) and China Machinery Engineering Corporation (CMEC); whereas Houlinhe Open Pit Coal Mine, subsidiary of SPI (State Power International) Mengdong (SPIM), formerly CPIM, has joined the SECMC board as a strategic investor with preference shares’ subscription.
Read More: Congratulations Pakistan: Thar coal plant starts producing electricity
The Thar mining project is categorized amongst the ‘early harvest’ projects under CPEC to generate electricity utilizing Thar’s untapped coal reserves. The mining project completed all tests, inspection and declared commercial operations date on July 10, 2019. The total planned mining capacity of the project will be 20.6 MT/annum with a capacity to scale it to 30.4 MT/annum while the power generation capacity is projected to be 3,960 MW at full capacity.
The first-ever Thar based 660MW Lignite Coal Power plant has made rapid progress and successfully achieved commercial operations date on July 10, 2019, thereby providing 660MW of electricity to the national grid. Engro Energy is the majority shareholder of Engro Powergen Thar Private Limited (EPTL), with CMEC; HBL; and Liberty being the remaining shareholders.
It is expected that this project would reduce the country’s dependency on imported coal and contribute towards closing the gap between energy demand and supply.