ADB and Pakistan Sign $900 Million Agreement for Jamshoro Power Plant

ISLAMABAD, PAKISTAN, an important agreement has been reached between the Asian Development Bank (ADB) and the Government of Pakistan. Under the agreement, ADB will extend a financial assistance package of $900 million for the development of the 600 MW Jamshoro Supercritical Coal-fired Power Plant.

ADB and Pakistan Sign $900 Million Agreement for Jamshoro Power Plant Development

The signing ceremony by ADB Vice President Venkai Zhang, Director General of Central and West Asia Department Klaus Gerhauser and Pakistan’s Finance Minister Mohammad Ishaq Dar called it an important moment in Pakistan’s energy landscape. Economic Affairs Division Secretary Nargis Sethi and ADB Country Director for Pakistan Werner Lippich signed the agreement.

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According to Mr. Zhang, this project has great potential to boost Pakistan’s energy sector by diversifying its energy sources. The shift to coal-based power generation is expected to significantly reduce the country’s cost of power generation and reduce dependence on expensive oil imports.

Pakistan has long been facing rising oil prices, dwindling gas reserves and a difficult foreign exchange situation, which has made it financially burdensome to import oil for power generation. Every year, Pakistan spends more than $14 billion on oil imports, a large portion of which is allocated to power generation.

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Chronic energy shortages in Pakistan have not only led to social unrest but also stunted economic growth, costing the nation 2% of its GDP annually. The planned 600 MW supercritical coal-fired power plant, designed to meet international and national environmental standards, will use an 80/20 blend of imported sub-bituminous coal and domestic lignite whenever available.

The project, approved by ADB’s Board of Directors in December 2013, is scheduled for completion by December 2018. Complementing ADB’s financing, the Islamic Development Bank will contribute $220 million, with the government pledging $380 million, to estimate the total cost of the project. 1.5 billion dollars.

The Jamshoro Power Project represents an important step towards energy security, economic growth and sustainable development in Pakistan.