CPEC: The Energy Component China Pakistan Economic Corridor (CPEC) is a great opportunity for Pakistan that needs a lot of preparatory work to be done. While energy crisis has been lingering in the country for more than a decade owing to the lack of adequate financing and funding among other factors, the energy component of CPEC offers a big opportunity with the investment of $34billion. The materialization of this opportunity into reality requires dire attention. In this context, Institute of Policy Studies (IPS) organized a roundtable session titled “CEPC: The Energy Component” on June 1, 2016. This brief report is based on the proceedings of the roundtable, which was addressed by Syed
Akhtar Ali, member energy, Planning Commission of Pakistan as the main speaker; while Mirza Hamid Hassan, Member IPS National Academic Council and former federal secretary, Water and Power, chaired the session. A number of energy experts, government officials, industry representatives, academics and journalists participated in the session. Syed Akhtar Ali in his presentation explained that CPEC has four components: Energy Cooperation; Infrastructure Development; Gwadar Port; and Industrial Cooperation. The below ta ble shows that CPEC’s Energy’s portfolio overwhelms the other three components in terms of investment
PROJECTS
US$ Millions
Energy
33,793
Transport and Infrastructure Roads
6,100
Rail Network
3,690
Gwadar Port
786
Others
44
Total
44,413
The projects to be financed under the energy component of CPEC1 would add a capacity of 17000MW in to the national grid.
The following recommendations came up during the interactive session:
The following issues were highlighted by Mirza Hamid Hassan in his introductory remarks:
1
Coal has large part in the energy mix as compared to the other sources. Secondly, it largely involve imported coal. Transportation challenge The lack of Local implementation capacity is also the cause of concern. Expanded capacity of generation needs expanded capacity of distribution line, while in CPEC energy component the focus is on generation capacity. There are less chances of transfer of technology. Financing cost should also be monitored so that consumers shouldn’t have to bear the burden in the end. There is little attention to the development of other forms of energy like oil and gas especially building the energy pipelines.
The list of Energy Projects is attached in annexure.
The government should review the energy portfolio of the China-Pakistan Economic Corridor (CPEC) because of the huge proportion of coal-fired projects. The government should persuade China to include financing of DiamerBasha and Pak-Iran gas pipeline projects under the CPEC. Although coal and LNG projects were providing a quick fix solution to the energy crisis, hydropower should always remain the top preference for Pakistan due to the associated benefits to the national economy, especially water storage and agricultural growth. There is need to balance the gap between generation and distribution side in the power projects of CPEC. The aspects of technology transfer and local industrialization/capacity building of indigenous human resource should not be neglected in the CPEC. Data available on the Planning Commission’s website about CPEC needs to be updated regularly.
Annexure 1
CPEC- Power Projects Sr. No Power Projects
MW
COD
1
Port Qasim Electric Company Coal Fired, Sindh (2X660 MW)
1320
2017-18
2
Sahiwal Coal-fired Power Plant, Punjab (2x660MW)
1320
2017-18
3
Engro thar Coal-fired, Thar Sindh (2x330MW)
660
2017-18
6
1320
2,018
7
SSRL Mine Mouth Power Plant, Thar, Sindh (2x660 MW) Gwadar Coal Power Project, Gwadar (300 MW)
300
2018
8
Hubco Coal Based IPP, Coastal (1x660 MW)
660
2,019
9
Salt Range Mine Mouth Power Project (300 MW)
300
2,018
10
1000
2,016
11
Quaid-e-Azam 9000 MW Solar Park, Bahawalpur, Punjab Dawood 50 MW wind Farm, Bhambore, Sindh
50
2,017
12
UEP 100 MW wind Farm, Jhimpir, Sindh
100
2,017
13
Sachal 50 MW Wind Farm, Jhimpir, Sindh
50
2017
15
Suki Kinari Hydropower Station, KPK
870
2,020
16
Karot Hydropower Station, AJK & Punjab
720
2,020
17
Kohala Hydro Project
1100
2,023
CPEC- Energy Projects
Sr. No 1 2
SSRL Thar Coal Block Surface mine in Block II of Thar Coal field, Thar Sindh
Sr. No 1 2
Transmission Project South-North Transmission Line Material-Lahore Transmission Line
Sr. No 1
Mining Projects
Mining Projects Gawadar Nawabshah LNG terminal and Pipeline Project
Capacity (MTPA)
COD
6.5 3.8
2017 2017
Executing Company State Grid State Grid
Executing Company ISGS
Prepared by: Waqar un Nisa, Assistant Research Coordinator, Institute of Policy Studies (IPS), Islamabad.
