Govt bans new power plants based on imported fuel

ISLAMABAD: In a major policy decision, the government has imposed ban on new power plants based on imported coal, LNG and fuel except the projects that are finalised under the CPEC or mutually agreed between the governments of Pakistan and China.

However, the investors will be encouraged to install hydropower plants and local coal-based power houses.

This was disclosed in a letter written to the Private Power Infrastructure Board (PPIB) by the Ministry of Water and Power signed by Secretary Younas Dagha. A copy of is available with The News.

The Ministry of Water and Power has informed the PPIB that the government has decided to disallow more power plants in the country based on imported furnace oil, diesel, high speed diesel, LNG and coal, so the PPIB now need not issue the LoI (letter of intention) to the new power plants based on imported fuel except the projects which are bilaterally agreed between the governments of Pakistan and China or the projects named under CPEC’s projects’ list.

As per the plan carved out by the Ministry of Water and Power, the letter mentions that 13,207 MW power will be injected into the system by 2018 that also includes 3,600 MW electricity based on LNG, 2,632 MW of hydel electricity, 3960 MW based on local and imported coal. In addition some other projects will also come on stream by the time.

“By 2018, the new injection of 13,207 MW electricity will not only mitigate power shortage in the country, but also provide comfortable spinning reserves. Under the plan, additional electricity of 22,380 MW will be added to the system by 2022 owing to which the electricity production capacity will swell up to 53,405 MW.”

The Ministry of Water and Power imposed the ban on installing more power houses based on imported fuel on account of the decision taken in the inter-ministerial meeting headed by Finance Minister Ishaq Dar, top officials privy
to the development also told The News.

However, some investors lodged their protest over the sudden ban on new power plants based on imported fuel saying some of them under power policy 2013 had also purchased the land for the power plants and their plans to arrange financing from international financial institutions had also been finalized. However, the sudden imposition of the ban has demoralized them, the official said while quoting some investors.

The official said the project of fast track power plant based on LNG has also been halted. A private company had managed to get 225 MW fast track power plant based on LNG, but owing to the ban this project has been shot down.

The official said the approval from council of common interest (CCI) was more appropriate prior to imposing the ban, as provinces are in involved in installing the power plants too.