Meeting Japanese envoy: Pakistan offers power projects for investment

Pakistan offered Japan to invest in power transmission projects after it turned down an earlier offer by Tokyo for financing a new 650-megawatt supercritical coal-fired power plant at Lakhra, Sindh.

Finance Minister Ishaq Dar extended the offer during a meeting with Ambassador of Japan to Pakistan Takashi Kurai, who called on him to discuss the Japanese investment in the power sector.

“During the meeting, the ambassador was briefed on projects, which are in the pipeline and can be considered for mutual cooperation and Japanese economic assistance,” according to a hand-out issued by the Finance Ministry after the meeting. However, the Finance Ministry did not disclose the names of the projects that had been offered to Japan for investment.

Secretary Economic Affairs Division Tariq Bajwa and Secretary Water and Power Younus Dagha attended the meeting.

The officials said that Japanese ambassador asked Dar to give his proposals in writing.

Earlier, Japan was keen to provide a loan of $1.7 billion for construction of a new power plant at Lakhra. The loan had been linked with the purchase of machinery and plant from Japanese vendors. Japan International Cooperation Agency (JICA) had done a feasibility study for installation of the plant.

However, Pakistan refused to take Japanese investment due to opposition by the respective ministries. Pakistan Railways, EAD and Ministry of Water and Power did not support the proposal to set up a supercritical coal-fired power plant.

Officials of the Ministry of Railways did not give a firm commitment for logistical support for transporting coal to the site. Pakistan Railways was preoccupied with the CPEC projects and sparing freight wagons for coal supply to yet another power project was not possible.

Another reason for opposing the project was the expected high cost of power generation when compared with the Asian Development Bank (ADB)-funded Jamshoro coal-fired power plant, said the officials.

The location of the project, which was less than 40 kilometres from the Jamshoro power plant, was another reason for opposing the new project. The existing Lakhra power plant has a generation capacity of 150MW but the output was low due to the out-dated technology and high cost of generation. The project was also on the active list of privatisation.

The government’s decision to refuse Japanese investment led to wastage of money and resources that JICA had invested in the Lakhara project. The officials said that Japan wanted a firm commitment from Pakistani side this time.