Pakistan Pulls Plug On Joint Coal Plant Project With China Due To Lack Of Funds

China-Pakistan Coal Power Plant
The Guddo Power Plant located in Sukkur, Sindh, Pakistan (Photo: Wikimedia Commons)

Due to a lack of funds, the Pakistani government has now requested China to temporarily halt its ongoing project to build a US$2 billion coal power plant. The project is part of the China-Pakistan Economic Corridor Infrastructure project (CPEC). Officials claimed that the project was more than they bargained for and that they could no longer afford it during this time. The project is also not yet a big priority for the country, which is facing a number of other issues.

Pakistan's Minister for Planning and Development, Makhdoom Khusro Bakhtyar, flew to China last month to discuss the partnership. The minister formally requested China to shelve the joint project in lieu of its current financial situation. According to the minister, the project was deemed too expensive and their government had decided that they needed to spend the money on more pressing projects. This included the development of new infrastructure that would link the lands of Baluchistan and Khyber-Pakhtunkhwa. Pakistan is also looking at expanding its agricultural sector.

The Pakistani government had also previously revealed that they currently have ample power generation thanks to its other ongoing power plant projects. China's ambassador to Pakistan, Yao Jing, mentioned in a statement that China is open to changes that may help Pakistan push through with the project. Although, the deputy chief at the Chinese embassy in Islamabad had previously hinted that the Pakistani government was going to abandon the project due to lack of funds.

The proposed US$2 billion power plant that was part of the CPEC project would have added an additional 1,320 megawatts to the country's national grid. The previous government, which was headed by Nawaz Sharif, was against the project due to its immense cost. Chinese officials were finally able to agree on a compromise, which resulted in its approval. China has continually tried to scale back the proposed projects included in the CPEC to try and work with Pakistan's budget.

The CPEC project is also part of China's Belt and Road Initiative, which had the goal of improving trade and commerce between China and Pakistan. Apart from the coal power plant, the initiative includes the building of roads, railways, and oil pipelines from the western region of Xinjiang to the Gwadar port in Pakistan. The vast network was initially expected to be completed around 2030. When completed, the initiative would drastically improve China's import trade routes, not only to Pakistan but to the rest of the Middle East and Africa. 

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