50 MW IPP’s plant likely to be installed in Gwadar Port

ISLAMABAD, Jun. 7 (DNA): After a new hike in petrol prices, a proposal to install a 50 MW Independent Power Producer (IPP)’s plant in collaboration with Chinese power producers in Gwadar is going to be floated in a crucial meeting, which is likely to be held this week in Islamabad between the government and Chinese companies in Gwadar. 

According to Gwadar Pro, Gwadar electricity shortage that remained atop during PM’s visit to Gwadar has finally been listed as the utmost priority among other challenges to be pondered during the course of Gwadar-centric meeting, sources from Ministry of Planning, Development, and Reform revealed. 

Long- and short-term proposals from the PM’s side and from China Overseas Port Holding Company (COPHC), which will also represent other Chinese enterprises, have been laid down and the meeting will greenlight prompt courses of actions to fix electricity issues, sources said.  

For long, Chinese companies have been overstressed by overpriced power production by 8.5 MW generators in Gwadar Free Zone against the backdrop of non-availability of power supply from government. Now on the heels of inflated petrol prices, the cost of electricity has gone up to the roof, putting extreme burden on corporate finance. 

“Before petrol price surged, Gwadar Port used to purchase petrol at a cost of Rs. 20.3 million monthly. Chinese companies in Gwadar Free Zone were charged Rs. 49 per unit accordingly, which was very high. 

In a new scenario, when Rs. 60 has been increased in petrol price, the monthly purchase cost for Gwadar companies has soared to Rs. 25.5 million. It is more than 25 percent rise,” a COPHC official said. 

COPHC has proposed that if the government allows relevant terms and conditions conferred to IPPs, COPHC in collaboration with Chinese power producers can generate 50 MW sufficiently. “Chinese IPPs’ power cost will be more affordable. 

This will not only be a shot in the arms of the already functional enterprises but will also embolden new investors to operate in Gwadar Free Zone with a peaceful mind,” he added. 

Currently, in Gwadar free Zone, around 51 companied have been registered. Around 10 companies including CBC, H.K. Sons, Agvon, Linyi Trade City, China Ecological Company, China Harbor Engineering Company, Hengmei, Jintai and others are up and running their functions.  

Chairman COPHC Zhang Baozhong said “We cannot develop until enough electricity is available. At COPHC, we produce electricity by generators which is very expensive. Chinese investors are keen to shift their industries from China to Pakistan. 

Areas of investment are very diverse and include but not limited to refinery, assembly, petrochemical, and textile. However, without power, the shift might not be possible,” he said. 

“There are strong intentions from Chinese investors to invest $5 million to set up an oil refinery in Gwadar. Once the plan is materialized, job opportunities can be offered to the locals in addition to booming business activities,” he added. 

From the government side, there are many overtures to fix energy crisis in Gwadar. The government plans to import 70-to-100-megawatt Iranian electricity to power up Gwadar Port. The average supply from Iran hovers around 40-70 MW.  

The 300 MW coal-fired power plant under-construction in Gwadar will be completed by 2023.  Another option is to lay down a transmission line of 220 KV from the national grid to Gwadar.  

Gwadar Port is poised to reshape the economic landscape of Pakistan in addition to opening multiple avenues for foreign direct investment. In this regard, Gwadar holds pivotal importance. The development of Gwadar is sine qua non for Pakistan’s development.