Business

Pakistan plans to quadruple domestic coal-fired power, move away from gas

Published

2 years ago

Farwa

Energy minister says LNG is no longer part of long-term plan.
Country plans increasing domestic coal-fired power capacity to 10GW in medium-term.
Pakistan’s annual LNG imports fell to lowest levels in five years.

ISLAMABAD: Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming years, its energy minister told Reuters on Monday, as it seeks to ease a crippling foreign-exchange crisis.

A shortage of natural gas, which accounts for over a third of the country’s power output, plunged large areas into hours of darkness last year. A surge in global prices of liquefied natural gas (LNG) after Russia’s invasion of Ukraine and an onerous economic crisis had made LNG unaffordable for Pakistan.

“LNG is no longer part of the long-term plan,” Pakistan Energy Minister Khurram Dastgir Khan told Reuters, adding that the country plans to increase domestic coal-fired power capacity to 10 gigawatts (GW) in the medium-term, from 2.31 GW currently.

Pakistan’s plan to switch to coal to provide its citizens reliable electricity underscores challenges in drafting effective decarbonisation strategies, at a time when some developing countries are struggling to keep lights on.

Despite power demand increasing in 2022, Pakistan’s annual LNG imports fell to the lowest levels in five years as European buyers elbowed out price-sensitive consumers.

“We have some of the world’s most efficient regasified LNG-based power plants. But we don’t have the gas to run them,” Dastgir said in an interview.

The South Asian nation, which is battling a wrenching economic crisis and is in dire need of funds, is seeking to reduce the value of its fuel imports and protect itself from geopolitical shocks, he said.

Pakistan’s foreign exchange reserves held by the central bank have fallen to $2.9 billion, barely enough to cover three weeks of imports.

“It’s this question of not just being able to generate energy cheaply, but also with domestic sources, that is very important,” Dastgir said.

The Shanghai Electric Thar plant, a 1.32 GW capacity plant that runs on domestic coal and is funded under the China-Pakistan Economic Corridor (CPEC), started producing power last week. The CPEC is a part of Beijing’s global Belt and Road Initiative.

In addition to the coal-fired plants, Pakistan also plans to boost its solar, hydro and nuclear power fleet, Dastgir said, without elaborating.

If the proposed plants are constructed, it could also widen the gap between Pakistan’s power demand and installed power generation capacity, potentially forcing the country to idle plants.

The maximum power demand met by Pakistan during the year ended June 2022 was 28.25 GW, more than 35% lower than power generation capacity of 43.77 GW.

It was not immediately clear how Pakistan will finance the proposed coal fleet, but Dastgir said setting up new plants will depend on “investor interest,” which he expects to increase when newly commissioned coal-fired plants are proved viable.

Financial institutions in China and Japan, which are among the biggest financiers of coal units in developing countries, have been backing out of funding fossil-fuel projects in recent years amid pressure from activists and Western governments.

Business

With its second-largest surge ever, PSX approaches 114,000 points.

Published

5 hours ago

Farwa

Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

Business

In interbank trade, the Pakistani rupee beats the US dollar.

Published

1 week ago

Farwa

In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

Business

Phase II of CPEC: China-Pakistan Partnership Enters a New Era

Published

1 week ago

Farwa

The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.