Gwadar power station

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Gwadar power station (瓜达尔燃煤电站) is a permitted power station in Gwadar Port, Gwadar, Balochistan, Pakistan. It is also known as Thar Coal Based Power Project.

Location

Table 1: Project-level location details

Plant name	Location	Coordinates (WGS 84)
Gwadar power station	Gwadar Port, Gwadar, Balochistan, Pakistan	25.2052, 62.3519 (approximate)

The map below shows the approximate location of the power station.

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Project Details

Table 2: Unit-level details

Unit name	Status	Fuel(s)	Capacity (MW)	Technology	Start year
Unit 1	permitted	coal: unknown	150	subcritical	2025 (planned)
Unit 2	permitted	coal: unknown	150	subcritical	2025 (planned)

Table 3: Unit-level ownership and operator details

Unit name	Owner	Parent
Unit 1	CIHC Pak Power Co Ltd [100%]	China Communication Construction Group Ltd [75.5%]; Tianjin STATE-OWNED CAPITAL Investment and Management Co Ltd [24.5%]
Unit 2	CIHC Pak Power Co Ltd [100%]	China Communication Construction Group Ltd [75.5%]; Tianjin STATE-OWNED CAPITAL Investment and Management Co Ltd [24.5%]

Project-level coal details

• Coal source(s): South Africa
• Permit(s):

Background

According to a December 2014 overview of the China-Pakistan Economic Corridor (CPEC) in Pakistan Today, "Gwadar Coal Power Project 300 megawatts" was listed among the "significant energy projects" totaling 10,400 MW that were being installed in the corridor. However, the Gwadar project did not appear in the list published in April 2015 of the 51 memorandum of understandings (MoU) signed under the agreement. A November 2014 Business Recorder report indicated that Chinese officials "had not given a positive response" to the Gwadar project. The power station was part of the Gwadar Port project, a planned coal terminal linking China and Pakistan.

After a meeting with Chinese investors in January 2016, PM Sharif reiterated the government's support of the Gwadar power station project, along with many others included in CPEC. However, concrete details on the project were not announced.

In April 2016, "official sources" said that the government was "all set to shelve" the plan for the coal plant and instead build a series of RLNG-based 100 MW plants. According to a Planning Commission official, the final decision would be taken by the Ministry of Water and Power and Gawadar Development Authority. In May 2016, the federal planning minister criticized the federal water & power ministry for proposing a coal power plant at the site, arguing that three 100-MW oil- or gas-fired power plants should be built instead of coal units in order to limit pollution.

However, in June 2016, the federal government allocated Rs 20 million (US$200,000) for a pre-feasibility study of the Gwadar coal plant.

In March 2017, Pakistan's Economic Coordination Committee awarded the project's contract to the China Communi­cation Construction Group (CCCC), a Chinese state-owned firm, without bidding. In May 2017, Pakistan's Private Power and Infrastructure Board issued a letter of intent to CCCC. CCCC's license was under review by the Pakistan government. The total cost for the project was approximated $492.94 million, which was expected to be financed in a debt to equity ratio of 75:25. The CCCC would be the main sponsor of the project and would hold 75.5 percent equity in the project, while the remaining 24.5 percent equity would be invested by Tianjin Energy Investment Group Company Limited. The subsidiary that would build the plant was called CIHC Pak Power Company Limited (CPPCL) (CIHC stands for CCCC Industrial Investment Holding Company).

In January 2018, the Environment Impact Assessment (EIA) report had been submitted. A public hearing was attended by the Director-General of the Balochistan Environmental Protection Agency, representatives of CIHC Pak Power Company Ltd, experts of developmental and environmental affairs, NGOs, chairman of municipal committee of Gwadar district, and a large number of concerned citizens from the area. The project was issued a conditional no-objection certificate (NOC) requiring that electricity from the new plant be supplied free of charge to household consumers of the area.

In June 2018, the provincial government, under pressure from the federal government, announced that it would expedite the approval and land acquisition process for the project, and that the project "would enter implementation stage soon."

In December 2018, the National Electric Power Regulatory Authority set a tariff for electricity produced by the plant. Provincial regulatory approval was still ongoing at that time. The provincial government of Balochistan had apparently expressed concerns about the plant's effects on pollution, and on Pakistan's commitments in the Paris Agreement; it said that its concerns had gone unanswered by CPPCL, the project's sponsor.

In February 2019, CPPCL rejected the government's proposed tariff, saying that the government had unilaterally reduced return on equity on the project from 17% to 14%. In May 2019, negotiations over the plant's tariff were ongoing. In September 2019, NEPRA pledged to soon resolve all pending tariff issues on the project.

A groundbreaking ceremony for the plant was held on November 4, 2019. According to the Pakistan Ministry of Energy (updated December 12, 2019), financial close for the plant was in progress.

In May 2020, project developers secured 207 acres of land for the plant.

In September 2020, Power China signed a contract for the operation and maintenance of the power station in the next seven years.

A power purchase agreement (PPA) was signed on April 8, 2021.

In June 2021, work was reported as in full swing – it is unclear what this exactly signified. The project was expected to be functional by October 2023.

Pakistan’s Indicative Generation Capacity Expansion Plan 2021-30 approved by the National Electric Power Regulatory Authority in September 2021 listed the project for commissioning in June 2023.

In May 2022, the project was again confirmed to be coming online by the end of 2023. Gwadar Development Authority's "Masterplan 2050" includes the Gwadar Power Plant, the New Gwadar International Airport Project, the China Pak Friendship Hospital, China-Pak Technical and Vocational Institute in Gwadar, the Gwadar East-bay Expressway Project, Gwadar Free Zone, and Gwadar Port. As of 2022, the large-scale development project was being restricted by a shortage of power.

Solar plant proposed and rejected

In July 2022, The News reported that the Power Division had decided to abandon the plant and replace it with a solar plant. “We have decided to abandon the project, but we will have to take up the issue at various CPEC forums with our Chinese counterparts. CPEC projects have sensitivity and importance which is why the Power Division’s decision to replace the imported coal-based project at Gwadar with a solar plant is being kept at a low profile,” an official said. Federal Minister for Power Division Khurram Dastgir Khan also hinted the government wanted the Chinese power plant at Gwadar to be replaced with a solar power plant of 300MW.

In October 2022, sources told The Express Tribune that the government had also recently informed the sponsor of the project – China Communications Construction Group (CCCG) – about its decision. Pakistan’s Minister for Planning, Ahsan Iqbal, reportedly requested that feasibility studies be conducted regarding alternative power development possibilities. Changes to projects sponsored under the China-Pakistan Economic Corridor require the support of the Joint Cooperation Committee, which was set to convene by the end of that month.

However, that same month, it was also reported that the coal project was still on the agenda of Prime Minister Shehbaz Sharif for his visit to Beijing starting November 1, 2022. CHIC Pak Power Company was also reportedly inflexible on shifting the plans from from imported coal to Thar coal, and discussions were ongoing.

In December 2022, Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal asked the China Overseas Ports Holding Company Ltd (COPHCL) to provide the exact demand of the electricity for Gwadar Free Zone and share 10-year plan for electricity consumption by Gwadar Free Zone Company in order to establish exact electricity utilization. The minister made these remarks while chairing a meeting to review progress on the coal project.

In a list of "Upcoming IPPs" dated December 29, 2022, a 300 MW project was also listed as set for July 2028 "Subject to relocation to Thar" (with the Letter of Support "issued" and Financial Close "in progress"). The project location was listed as Thar, Sindh.

Switch to domestic coal rejected

On January 19, 2023, it was reported that the Prime Minister had taken a policy decision to go ahead with the Gwadar Power Project, "as had been repeatedly requested by the Chinese Government." Previously, the Government of Pakistan had finalized plans to shift the Gwadar coal power plant from imported coal to Thar coal, but the Chinese government had refused to accept the change. Following a visit to China, Pakistan's Prime Minister was compelled to alter its decision, and the Chinese Foreign Ministry sought written confirmation. Additional information about financing is highlighted below.

As of 22 March 2023, in the list of 'Upcoming IPPs', the project was listed with completion already in December 2025 (2.5 years earlier than the previous date July 2028), with the letter of support as 'Issued' and Financial close 'in progress'. The project's location was listed in Gwadar, Balochistan. Furthermore, a media report from 17 March 2023 stated that Pakistan's Private Power and Infrastructure Board is "pressuring the Chinese company to complete its financial closure by December 31, 2023, and to begin construction as soon as possible so that it can be finished by 2025."

In July 2023, the "Upcoming IPPs" page did not provide any additional information.

In August 2023, Pakistan's National Electric Power Regulatory Authority (NEPRA) reportedly increased the power station's power tariff from 7.9 rupees to 22.34 rupees per unit due to the devaluation of the rupee. The estimated cost of the power station's development grew from 42 billion rupees to 103 billion rupees.

In November 2023, Chinese project developer CIHC Pak Power Company had reportedly agreed to start work on the proposed power station, subject to finalization of the revised power tariff agreement by NEPRA.

According to reporting from January 2024, CIHC Pak Power Company had requested a third review of the NEPRA tariff in December 2023. In addition, the Government of Pakistan had reportedly assembled a committee to evaluate the power station project and find a way to expedite it or suggest an alternative power supply for Gwadar if CIHC Pak Power Company did not renew its Performance Guarantee by March 21, 2024.

In late March 2024, Pakistan's Ministry for Planning, Development and Special Initiatives called for the coal-fired power plant project to be expedited, with construction starting as soon as possible. The power station was reportedly on a "priority list" of China-Pakistan Economic Corridor (CPEC) projects. The head of the Ministry, Ahsan Iqbal, stated that "no delay will be accepted" and that Gwadar was the "gateway of CPEC".

In April 2024, the power station was described as "on hold due to disagreements over size, location, and fuel type".

In May 2024, Pakistan's Minister for Planning stated that a groundbreaking ceremony would be held for the Gwadar coal-fired power station project by the end of the year.

In June 2024, an article discussing outstanding dues around China-Pakistan Economic Corridor projects reported that CIHC Pak Power Company had "expressed concerns regarding viability of the tariff determination of May 14, 2024 for 300-MW coal fired power plant at Gwadar". The updated tariff proposed by CIHC Pak Power Company increased the EPC cost of the project from US$283.85 million to US$444.49 million.

According to reporting from September 2024, the Private Power & Infrastructure Board (PPIB) had set a September 18 deadline for the CIHC Pak Power Company to respond to PPIB’s concerns about the coal plant project. In the absence of a response, the PPIB had warned the government will end its support for the imported coal project. CPPCL requested the development of an alternative proposal.

Financing

In 2015, the Chinese government committed to finance the development projects at the Gwadar Port, including US$320 million for a coal-fired power station, as part of the China-Pakistan Economic Corridor (CPEC).

China Communi­cation Construction Group and Tianjin Energy Investment Group are jointly developing the project, which was estimated to cost about US$430 million total in 2018. As of August 2021, the project still had not reached financial close and was seeking US$434 million in debt financing. Zeeruk International is acting as the financial advisor to the sponsors for the project.

The Chinese AIDDATA project at the University of William and Mary reports that the total cost of the power station will be US $542.36 million, financed on an 80:20 debt to equity ratio. China Communications Construction Company Limited and Tianjin Energy Investment Group will cover the equity portion of US$108.47 million. Industrial and Commercial Bank of China was identified as the potential lender for the $433.88 million debt portion. Sinosure was providing risk insurance for the transaction.

In February 2022, the Pakistan government agreed to include the much-delayed Gwadar power plant in its highest priority schemes for payment of invoices after commissioning of the project. The move was designed to address concerns from Chinese insurance companies, which had previously refused to provide guarantees for a loan for Gwadar due to payment problems being faced by other Chinese power projects that started power generation in Pakistan. In return for giving highest priority to the project, the Chinese government agreed that it will now provide all necessary support and assistance for financial closure to complete the project at the earliest. The revised deadline for financial close of the project had been June 2019 that was further extended to June 2021. China has missed the second revised deadline and Pakistan has again urged China to ensure early financial close of the project.

On January 19, 2023, it was reported that China had reaffirmed strong resolve to extend financial support to Pakistan including early confirmation of two loans, i.e., from Industrial and Commercial Bank of China and China Banking Corporation. A media report from 17 March 2023 referred to plans to complete financial close by the end of 2023.

In December 2023, CIHC Pak Power Company reportedly requested that financial close be extended by another three years to January 2027.

In March 2024, the Private Power & Infrastructure Board (PPIB) extended the financial close deadline for the Gwadar plant to December 31, 2024.

In June 2024, an article in the Pakistan Daily stated that Sinosure was not allowing further investment in Gwadar power station, as Pakistan currently owed Chinese Independent Power Producers, such as CIHC Pak Power Company, a combined $1.68 billion in outstanding payments.

As of August 2024, financial close for the power station was still "in progress".

Opposition

The power station has been met with deep skepticism and criticism, including from Malik Amin Aslam, a former state minister for the environment serving as global vice-president of the International Union for Conservation of Nature. For example, in addition to increasing air pollution and creating waste and coal transport issues, the power station will add to the region's significant water woes.

Website

• 300MW Imported Coal Based Power Project At Gwadar, Pakistan, CPEC-Energy Priority Projects

Articles and Resources

Additional data

To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.