Islamabad: The Asian Development Bank (ADB) and the Government of Pakistan on Wednesday signed an agreement under which ADB will provide $900 million for the 600 MW Jamshoro supercritical coal-fired power plant, says a press release.
ADB Vice President Wencai Zhang, Director General of the Central and West Asia Department Klaus Gerhaeusser and Pakistan’s Finance Minister and ADB Governor Muhammad Ishaq Dar witnessed the signing of the agreement by Nargis Sethi, Secretary Economic Affairs Division, and Werner Liepach, ADB’s Country Director for Pakistan.
“The project will boost low-cost power supply and improve Pakistan’s energy mix. Diversifying to coal will help the country cut down its electricity generation cost, and reduce its oil import bill.” Mr. Zhang said.
Pakistan has been facing rising oil prices and declining gas reserves as well as tight foreign account situation, rendering the reliance on the import of oil to fuel power plants increasingly unaffordable.
The country spends more than $14 billion per year on importing oil, a major part of which goes into power generation. A more efficient and sustainable energy mix can spur economic growth and create employment opportunities for millions.
The Jamshoro power project was approved by the ADB’s Board of Directors in December 2013. The project is expected to be completed by December 2018.
The Islamic Development Bank will provide $220 million whereas $380 million will be the government’s contribution to meet the overall estimated project cost of $1.5 billion.