Photo courtesy PID
Prime Minister Shehbaz Sharif on Monday inaugurated the commercial operations of the 330MW Thar Energy Limited (TEL) Power Plant, as well as inspecting Phase II of the SECMC Thar coalmine, saying the project can help the government save up to $6 billion in fuel imports.
Accompanied by Foreign Minister Bilawal Bhutto-Zardari, Sindh Chief Minister Murad Ali Shah, Chinese Ambassador to Pakistan Nong Rong and various other dignitaries of the federal and provincial governments, the prime minister congratulated management for the achievement. Emphasizing that cheaper energy production through coal from Thar would prove very beneficial for Pakistan’s development, as it would allow the government to save up to $6 billion on fuel imports.
Addressing a ceremony in Thar to mark the launch of the commercial operations, Sharif said it was “heartening” to know that TEL could produce electricity for Rs. 17/unit, with potential to reduce the rate further to Rs. 10/unit, against the existing per unit cost of Rs. 25-34. Emphasizing the need to convert Pakistan’s existing power plants into coal plants, he claimed this would prove a “game-changer” for the country’s economic progress.
Thanking the Chinese government for its support in helping Pakistan set up these projects, he said the real benefit of Thar coal would be achieved once an affordable mechanism was implemented to transport coal across the country. He said authorities planned to launch a railway line next year for this purpose, adding the costs would be shared equally between the federal and Sindh governments.
In his address, the foreign minister stressed that the real benefit of Thar coal would be achieved when its output was used in power plants across Pakistan. Stressing that establishing Thar Coal projects was a great example of public-private partnership, he said he wished to use the same model to set up green energy projects in future. “We can bring a green energy revolution in the country with untiring efforts,” he said, and requested the prime minister to inaugurate the upcoming ThalNova Power Plant in 3-4 months.
The Sindh chief minister also praised the project, saying its impact went beyond ensuring the energy security of Pakistan. He said these projects had also allowed the Sindh government to build roads, an airport, and state-of-the-art hospitals in Thar.
Earlier, the prime minister and other dignitaries were given a tour of the plant by HUBCO Board Chairman Habibullah Khan and HUBCO CEO Kamran Kamal. Explaining the significance of the project, Kamal highlighted that TEL was based on European technology, with the boiler, turbine and generator all designed and manufactured by General Electric. This, he said, would lead to higher reliability standards and reduced emissions. He also explained that the plant would generate electricity at extremely affordable rates, with the variable fuel cost to be approximately Rs. 3/kWh compared to Rs. 28-30/ kWh for RFO, RLNG and imported coal.
Kamal said local residents had been inducted and trained at HUBCO’s Hub plant in 2019, adding they were now working at TEL as engineers and technicians. Noting that TEL was the first coal plant to be completely operated by a Pakistani team, he hoped a local Thar resident would serve as the plant manager in 8-10 years.
In his address, the HUBCO chairman acknowledged the efforts of the federal and Sindh governments in turning the Thar dream into a reality. Noting that HUBCO remained Pakistan’s largest IPP, he said it had grown from 1,600MW in 2018 to 3,300MW now. As a stakeholder in SECMC, he said, HUBCO has contributed toward the development of a model village providing housing, access to safe drinking water, educational and health facilities and other basic amenities to the local population. He also praised the facilitation given by the Power Ministry, Energy Department, NEPRA, PPIB, CPPA, NTDC and others in realizing the Thar Dream.
Discussing the challenge posed by circular debt, Khan said it had created a liquidity crisis that limited the ability of existing power developers like HUBCO to invest in expansion projects, as well as discouraging foreign capital from contributing in the sector due to uncertainty in cash-flows. He urged the prime minister to resolve the circular debt issue to strengthen investor confidence and accelerate Pakistan’s economic development.
Chinese Ambassador Nong Rong, meanwhile, congratulated the HUBCO management, and the federal and Sindh governments on the successful completion of the project.
The TEL power plant is a 330MW mine-mouth lignite-fired power plant at Thar Coal Block II and is a part of the China-Pakistan Economic Corridor (CPEC). A joint venture between HUBCO, the Fauji Fertilizer Company Limited and the China Machinery Engineering Corporation, it was jointly funded by a Chinese syndicate led by the China Development Bank and a Pakistani syndicate led by Habib Bank Limited. Construction on the project commenced in May 2018, with commercial operations launching on Oct. 1.