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News that the Pakistan government plans to secure financing and start construction on a long-stalled 300 megawatt coal-fired power plant<\/a> in the port city of Gwadar has triggered a debate on the direction of the country\u2019s energy sector. Set to be built and funded by Chinese state-owned entities, recent developments have also raised fresh questions about China\u2019s pledge<\/a> \u2013 made at the UN General Assembly in 2021 \u2013 not to build any new coal power plants overseas.<\/p>\n\n

The Gwadar coal power plant was first conceived in 2016, with an estimated cost of USD 542.32 million<\/a>. It is to be constructed by the Chinese company CIHC Pak Power, a subsidiary of the state-owned China Communications and Construction Group. The plant was recently reported<\/a> to have secured financing from the Industrial and Commercial Bank of China (ICBC), China\u2019s largest commercial bank. Once completed, it is intended to supply power, on a priority basis, to the industries being set up at the Gwadar Free Zone (GFZ), a special economic zone at Gwadar port that forms part of the China-Pakistan Economic Corridor<\/a> (CPEC), the USD 62 billion bilateral infrastructure and connectivity project between China and Pakistan.<\/p>\n\n

The environmental impacts of coal power \u2013 from local air and water pollution to carbon emissions \u2013 have made the project controversial.<\/p>\n\n

\u201cWe are pushing the Chinese company to complete its financial closure by\u00a031 December 2023, and start construction at the earliest so that it can be completed by 2025,\u201d Shah Jahan Mirza, managing director of the Pakistan government-owned Private Power and Infrastructure Board<\/a> told The Third Pole. \u201cElectricity shortage is the biggest impediment to developing Gwadar,\u201d he said.<\/p>\n\n

Pakistan\u2019s energy crisis<\/span>
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Political instability, weak energy policies and a reliance on imported fossil fuels have meant that Pakistan has faced an energy crisis for decades. The majority of Balochistan province, where the Gwadar coal plant is set to be constructed, is currently without electricity. <\/p>\n\n\n\n

In recent months, many other parts of the country have also faced prolonged power cuts, threatening industries and livelihoods. The energy shortfall has been exacerbated by the escalating prices of imported natural gas following Russia’s invasion of Ukraine, pushing the Pakistan government to search for new solutions to meet demand.<\/p>\n<\/div><\/div><\/div>\n\n

Pakistan\u2019s energy sector is dominated by fossil fuels. According to the country\u2019s Finance Division<\/a>, as of April 2022, just under 60% of total installed generation capacity used fossil fuels, including gas, oil and coal. Just 3% of generated electricity in the 2022 fiscal year came from non-hydropower renewables. Pakistan\u2019s Nationally Determined Contribution<\/a> (NDC) \u00ad\u2013 its climate pledge under the Paris Agreement \u2013 targets 60% renewable energy generation by 2030, including hydropower. The NDC also states: \u201cFrom 2020, new coal power plants are subject to a moratorium.\u201d<\/p>\n\n