Pakistan aims to save Rs 200 billion annually by stopping coal import

Islamabad, July 22: Pakistan is aiming to save Pakistani Rs 200 billion annually by shifting to local coal and stopping import of coal.

Federal Minister of Energy, Awais Leghari, said that Pakistan plans to urge Chinese independent power producers (IPPs) operating within its borders to transition from using imported coal to domestic coal from the Thar region.

This shift aims to reduce costs and enhance energy security, according to Leghari.

In a media interaction, Leghari maintained that these discussions will be a primary focus during Pakistan’s forthcoming visits to Beijing.

He said that in an upcoming visit, the Pakistani delegation will begin talks on restructuring Pakistan’s energy sector debt.

Emphasizing the importance of switching to local coal, Leghari stated, “One of the key purposes of going along is the conversion of our imported coal units to the local coal. That would have a huge impact on the cost of energy, of power in the near future. So that is one of the biggest (items on the) agenda.”

This initiative is expected to benefit Chinese-owned IPPs in Pakistan by reducing pressure on Islamabad’s foreign exchange reserves, making dividend repatriation easier, and potentially offering higher returns in dollar terms.

Leghari estimated that this transition could save Pakistan more than Pakistani Rs200 billion (US $700 million) annually in coal imports, potentially leading to a reduction of up to Rs2.5 per unit in electricity prices.