Gwadar power station

From Global Energy Monitor
This article is part of the CoalSwarm coverage of Pakistan and coal.
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Gwadar power station is a proposed 300-megawatt (MW) coal plant in Balochistan province, Pakistan.

Location

The map below shows the location of the Gwadar Port, the region of the proposed plant, in Gwadar district, Balochistan province. The plant may be proposed for Mouza Darbella Janubi near Sur Bundar, Tehsil.[1]

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Background

According to a December 2014 overview of the China-Pakistan Economic Corridor (CPEC) in Pakistan Today, "Gwadar Coal Power Project 300 megawatts" was listed among the "significant energy projects" totaling 10,400 MW that were being installed in the corridor.[2] However, the Gwadar project did not appear in the list published in April 2015 of the 51 memorandum of understandings (MoU) signed under the agreement.[3] A November 2014 Business Recorder report indicated that Chinese officials "had not given a positive response" to the Gwadar project.[4] The power station was part of the Gwadar Port project, a planned coal terminal linking China and Pakistan.[5][6]

After a meeting with Chinese investors in January 2016, PM Sharif reiterated the government's support of the Gwadar power station project, along with many others included in CPEC.[7] However, concrete details on the project were not announced.

In April 2016, "official sources" said that the government was "all set to shelve" the plan for the coal plant and instead build a series of RLNG-based 100 MW plants. According to a Planning Commission official, the final decision would be taken by the Ministry of Water and Power and Gawadar Development Authority.[8] In May 2016, the federal planning minister criticized the federal water & power ministry for proposing a coal power plant at the site, arguing that three 100-MW oil- or gas-fired power plants should be built instead of coal units in order to limit pollution.[9]

However, in June 2016, the federal government allocated Rs 20 million (US$200,000) for a pre-feasibility study of the Gwadar coal plant.[10]

In March 2017, Pakistan's Economic Coordination Committee awarded the project's contract to the China Communi­cation Construction Group (CCCC), a Chinese state-owned firm, without bidding.[11] In May 2017, Pakistan's Private Power and Infrastructure Board issued a letter of intent to CCCC.[12] CCCC's license was under review by the Pakistan government. The total cost for the project was approximated $492.94 million, which was expected to be financed in a debt to equity ratio of 75:25. The CCCC would be the main sponsor of the project and would hold 75.5 percent equity in the project, while the remaining 24.5 percent equity would be invested by Tianjin Energy Investment Group Company Limited. The subsidiary that would build the plant was called CIHC Pak Power Company Limited (CPPCL) (CIHC stands for CCCC Industrial Investment Holding Company).[13]

In January 2018, the Environment Impact Assessment (EIA) report had been submitted. A public hearing was attended by the Director-General of the Balochistan Environmental Protection Agency, representatives of CIHC Pak Power Company Ltd, experts of developmental and environmental affairs, NGOs, chairman of municipal committee of Gwadar district, and a large number of concerned citizens from the area. The project was issued a conditional no-objection certificate (NOC) requiring that electricity from the new plant be supplied free of charge to household consumers of the area.[14]

In June 2018, the provincial government, under pressure from the federal government, announced that it would expedite the approval and land acquisition process for the project, and that the project "would enter implementation stage soon."[15]

In December 2018, the National Electric Power Regulatory Authority set a tariff for electricity produced by the plant. Provincial regulatory approval was still ongoing at that time. The provincial government of Balochistan had apparently expressed concerns about the plant's effects on pollution, and on Pakistan's commitments in the Paris Agreement; it said that its concerns had gone unanswered by CPPCL, the project's sponsor.[16]

In February 2019, CPPCL rejected the government's proposed tariff, saying that the government had unilaterally reduced return on equity on the project from 17% to 14%.[17] In May 2019, negotiations over the plant's tariff were ongoing.[18] In September 2019, NEPRA pledged to soon resolve all pending tariff issues on the project.[19]

A groundbreaking ceremony for the plant was held on November 4, 2019.[20] According to the Pakistan Ministry of Energy (updated December 12, 2019), financial close for the plant was in progress.[21]

In May 2020, project developers secured 207 acres of land for the plant.[22]

In September 2020, Power China signed a contract for the operation and maintenance of the power station in the next seven years.[23]

A power purchase agreement (PPA) was signed on April 8, 2021.[24]

In June 2021, work was reported as in full swing – it is unclear what this exactly signified. The project was expected to be functional by October 2023.[25]

Financing

China Communi­cation Construction Group and Tianjin Energy Investment Group invested about US$430 million in equity in the project.[26] Zeeruk International is acting as the financial advisor to the sponsors for the project.[27]

Opposition

The power station has been met with deep skepticism and criticism, including from Malik Amin Aslam, a former state minister for the environment serving as global vice-president of the International Union for Conservation of Nature. For example, in addition to increasing air pollution and creating waste and coal transport issues, the power station will add to the region's significant water woes.[28][14]

Website

Project Details

  • Sponsor: CIHC Pak Power Company Limited (CPPCL)
  • Parent company: China Communi­cation Construction Group (75.5%), Tianjin Energy Investment Group (24.5%)
  • Location: Gwadar district, Balochistan province, Pakistan
  • Coordinates: 25.1079845, 62.3466396 (approximate)
  • Status: Permitted
  • Capacity: 300 MW (Units 1 & 2: 150 MW)
  • Type: Subcritical[16]
  • Projected in service: 2023
  • Coal Type:
  • Coal Source: Imported (through proposed coal jetty at Gwadar Port)
  • Source of financing: US$430 million in equity from China Communi­cation Construction Group and Tianjin Energy Investment Group[26]

Articles and resources

References

  1. "Grant of Generation Licence No. IGSPL/104/2019," NEPRA, November 13, 2019
  2. Mian Abrar, "China-Pakistan Economic Corridor — A new vista of development in South Asia," Pakistan Today, December 6, 2014
  3. "Details of agreements signed during Xi's visit to Pakistan," Dawn, April 20, 2015
  4. "Coal-fired power: China shows no interest in many Punjab projects," Business Recorder, November 16, 2014
  5. "Gwadar Port holds potential to facilitate foreign trade: official," The International News, March 21, 2015
  6. "Gwadar Port To Create Over 40,000 Job Opportunities," Pakistan Construction & Quarry, accessed July 2016
  7. "Initial work on CPEC economic zones starts," The News, January 12, 2016
  8. Mehtab Haider, "Govt set to shelve Gwadar Coal Project," The International News, April 26, 2016
  9. "Ministry ordered to come up with plan within a week," Urdu Wire, May 13, 2016
  10. "Rs 73.7b for 32 CPEC projects," CPEC Info, June 4, 2016
  11. "Chinese firm awarded Rs55bn power project at Gwadar," Dawn, March 31, 2017
  12. "LoI granted for 300 MW power plant in Gwadar," Pakistan-China Institute - CPEC portal, May 31, 2017
  13. "NEPRA accepts Chinese firm’s application for generation licence," Daily Times, September 16, 2017
  14. 14.0 14.1 "Gwadar to get free electricity to household consumers," Energy Central, January 15, 2018
  15. "Delayed 300MW power plant at Gwadar to enter implementation stage soon," The Nation, June 14, 2018
  16. 16.0 16.1 "Gwadar project: NEPRA sets tariff for 300MW coal-power plant," Express Tribune, December 21, 2018
  17. "CPPCL to review tariff for 300MW Gwadar coal plant," The News, February 2, 2019
  18. "Nepra likely to issue tariff determination for 300MW plant at Gwadar by May-end," The Nation, May 11, 2019
  19. "NEPRA to Decide Pending Tariffs of CPEC Energy Project," thenews.com.pk, September 14, 2019
  20. "300MW Imported Coal Based Power Project At Gwadar, Pakistan," CPEC-Energy Priority Projects, accessed December 2019
  21. Upcoming IPPs, Pakistan Ministry of Energy, December 12, 2019
  22. "MoU signed for coal-fired power plant in Gwadar," Tribune, February 1, 2020
  23. "Seven-year maintenance contract for Gwadar coal-fired power station under CPEC signed," China Pakistan Economic Corridor, September 22, 2020
  24. "300MW Imported Coal Based Power Project At Gwadar, Pakistan," CPEC-Energy Priority Projects, accessed June 29, 2021
  25. "Gwadar power plant to light up ‘gate of wealth’: Officials," Daily Times, June 20, 2021
  26. 26.0 26.1 "Projects inaugurated in Gwadar to help implement China-Pakistan Economic Corridor - Xinhua," xinhuanet, November 5, 2019
  27. "Preview of Gwadar Coal-Fired Power Plant (300MW) IPP," IJGlobal, accessed November 18, 2020
  28. "CPEC’s Environmental Toll: China is bringing coal power to Pakistan, and Pakistanis will pay the environmental price," The Diplomat, April 18, 2018

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