Despite the country’s dire need for increasing power generation, the fate of 320 megawatt (MW) power plant gifted by United Arab Emirates (UAE) hangs in the balance as the petroleum ministry refuses to allocate gas to operate the plant.
With this, the government may also lose a 100 million euro loan allocated by the European Investment Bank (EIB) for the project, which was agreed upon in February 2009.
The power plant is planned to be set up in the country’s textile hub Faisalabad, a city which is only able to meet one-third of its electricity demand.
“European Investment Bank (EIB) has linked the disbursement of 100 million euro loan with the allocation of gas for the plant but the petroleum ministry is not ready to provide gas due to its shortage,” senior official of Ministry of Water and Power said. The first shipment of the power plant arrived at Port Qasim in September 2010 but since then no work has been done on the installation of the plant due to blockade of loan.
The donor wants the plant to be operated on gas and produce cheap electricity rather than expensive alternate like furnace oil.
“Now, Ministry of Water and Power will move a summary to the Economic Coordination Committee (ECC) of the Cabinet to intervene and allocate gas for the power plant in order to receive the funds and install it,” he said.
A senior official of the petroleum ministry told The Express Tribune that the plant was old and its efficiency was very poor. “UAE gifted power plant produces 3MW power by using 1 million cubic feet per day (mmcfd) of gas while industry average is 6MW mmcfd. He said that the country was facing gas shortage that had affected all sectors and therefore gas could not be given to such plant that had poor generation capacity.
Former UAE Ruler late Sheikh Zayed Bin Sultan Al-Nahyan had promised to donate a power plant to help increase power generation in the country.
Following this promise, UAE authorities signed a memorandum of understanding (MoU) with former Federal Minister for Water and Power, Parvez Ashraf and worked out a detailed plan for dismantling, and shifting of the plant to Pakistan. The power plant was not in use in the oil-rich country as it had been replaced with a new plant.
Published in The Express Tribune, May 3rd, 2012.