ISLAMABAD: The Asian Development Bank (ADB) is providing a $900 million loan for a new supercritical coal power generation unit in Pakistan that will deliver reliable and cost effective electricity to hundreds of thousands of energy-starved households and businesses.
The coal-fired generation unit, the first in the country to use supercritical boiler technology, will be built at an existing power plant in the town of Jamshoro in Sindh province, about 150 kilometres east of the provincial capital, Karachi.
It will employ state-of-the-art emission control equipment resulting in cleaner emissions than the existing heavy fuel oil-fired generators and subcritical boiler technology, which is more commonly used, according to ADB statement issued on Monday.
Pakistan only has 19 percent of the global average for carbon dioxide emissions per person and has only one coal-fired power plant in operation generating 0.7 percent of the generation mix.
Recycling ash from the plant will also save about 115,000 tons of carbon dioxide equivalents per year, the statement said adding the electricity generated from the plant will alleviate some of the power shortages and replace generation from small individual oil and diesel generators which is expected to save a further 503,000 tons of carbon dioxide per year.
The new plant will generate electricity at a lower cost saving about $535 million per year on its fuel import bill compared with oil fired generation.
The new unit is a part of broader government efforts to decrease electricity tariff.
Coal-fired power plants, using cleaner technology, provide an environmentally sound and cost-effective medium-term energy solution at a time when the country’s natural gas reserves are dwindling.
Resolving the energy crisis is a priority for the country and the government is pursuing all options including large hydropower plants, renewable energy, energy efficiency, increasing domestic gas production, and importing electricity and natural gas.
Pakistan has substantial potential for large hydropower which will be developed to meet long-term energy needs because of the longer construction period involved.
Small and medium sized hydropower will be developed to meet medium-term needs, it said adding the stable base-load power provided by this project will enable the fluctuating power from solar and wind power to be used without disruption to the grid.
ADB’s assistance, which includes $870 million from ordinary capital resources and $30 million from its concessional Asian Development Fund, will be complemented by cofinancing of $150 million from the Islamic Development Bank and counterpart funds of $450 million from the government.
The project is expected to be completed by December 2018. ADB’s assistance will also provide 5 years of operation and maintenance support after its completion.