ADB approves $900m loan for Jamshoro Power Project

[Edevelop]

The Board of Asian Development Bank has approved financing of 900 million dollars loan for 1320 MW Jamshoro Power Project for its conversation to Coal.

The proposal was approved by the Board of ADB with 75% votes in favour.

The Finance Minister Ishaq Dar thanked ADB and all the countries which supported Pakistan’s proposal for financing Jamshoro Power Project.

The Finance Minister termed the approval as a break through and a giant leap forward‚ which would pave the way for constructing Coal Fueled Power Plant Projects being planned by Prime Minister Mohammad Nawaz Sharif’s Government.

The Government he said plans to construct coal power plants at Gadani with a total capacity of 6600 MW as part of its policy of producing electricity on

Radio Pakistan-
The proposal was approved by the Board of ADB with 75% votes in favour.

 

[Chak Bamu]

That is almost a billion dollars! I can not imagine so much money spent only on conversion. Some thing does not seem right. There must also be some sort of plant upgradation in this cost. Otherwise....

 

[farhan_9909]

why not just manufacture a new coal based plant on this much amount?

the Already existing one might be producing enpensive energy though energy availability is a bigger issue than the cost.

 

[Counter-Errorist]

Key links:

ADB Loan Project Data Sheet:
47094-001: Jamshoro Power Generation Project | Asian Development Bank

Jamshoro Power Co. Business Plan (2011-2016)
http://www.pc.gov.pk/hot links/energysection/Business Plan_for_JPCL_CPGCL_NPGCL/JPCL Business Plan Final Document.pdf?v=6qVHyaN9GiA

Some useful quotes studying the business plan:

Installed
capacity of the generating assets is 1,024 MW, which has declined
over the years to dependable capacity of 798.5 MW. A complex
pattern of internal and external factors constrain operating and
financial performance of the company. The company has been
operating with a negative bottom line, which has jeopardized
sustainability.

Thermal power is more expensive as compared to hydro power. Gas
is a cheaper fuel for power generation in Pakistan but gas reserves
are depleting and new discoveries are not on the horizon. Furnace
oil is more expensive and exposed to price volatility. Increased
dependence of power sector on furnace oil in the recent years has
impacted electricity price in the country. However, until power mix
shifts back in favor of hydro power and new gas discoveries are
made, oil fired plants are expected to remain in full possible
production, constrained only by affordability factors. Any expansion
in oil fired capacity is therefore not likely to be a right direction.

Primary cause of operating loss is declining thermal efficiency of
power plants. Revenue is accrued and billed to NTDC on the basis of
NEPRA determined heat rates. Whereas actual thermal efficiency is
lower than the basis for energy price calculation. Consequently, the
company incurs higher fuel costs than it can bill.

Thermal power is more expensive as compared to hydro power. Gas
is a cheaper fuel for power generation in Pakistan but gas reserves
are depleting and new discoveries are not on the horizon. Furnace
oil is more expensive and exposed to price volatility. Increased
dependence of power sector on furnace oil in the recent years has
impacted electricity price in the country. However, until power mix
shifts back in favor of hydro power and new gas discoveries are
made, oil fired plants are expected to remain in full possible
production, constrained only by affordability factors. Any expansion
in oil fired capacity is therefore not likely to be a right direction.

 

[Counter-Errorist]

From the ADB Data Sheet:

The project s impact will be an enhanced energy supply in Pakistan. The outcome will be a more efficient energy mix through diversification from expensive HFO to less expensive coal. The project will (i) increase the capacity of the Jamshoro TPS by installing a 600-MW (net) supercritical coal-fired unit, using an 80/20 blend of imported sub-bituminous coal and domestic lignite when available; (ii) provide 5 years of operation and maintenance (O&M) support; (iii) improve compliance with international and national environmental standards by installing emission control devices for the existing units and remediating the site; (iv) enhance the capacity of GENCO Holding Company Limited (GHCL) and Jamshoro Power Company Limited (JPCL) by providing financial, technical, and operational training; and (v) promote education on coal-fired plant operation by providing on-the-job training, and integrating such training into technical school curriculum. The infrastructure developed will also support government s plan to have an additional 600-MW unit at the same site.

Description of Project Outputs:

1. Jamshoro TPS capacity increased
2. National environmental standards complied with by Jamshoro TPS
3. Executing agency and implementation agency staff capacity enhanced
4. Coal-fired power plant operation introduced in technical school curriculum

Power shortages equaled about one-third of total demand (4,000 5,000 MW) during most of FY2012 (ending July 2012).

akistan has 23,538 MW of installed power generation capacity and 14,000 MW of available capacity on average. Many HFO-fired power plants are not fully utilized because of a shortage of funds for fuel. The increase in HFO-fired power generation is the major reason the cost-recovery tariff (average tariff) has continuously increased.

Only 6,716 MW of a potential of over 40,000 MW of hydropower has been tapped, making hydropower from large dams the ideal solution.

To be competitive economically, Pakistan cannot afford a continued reliance on expensive imported oil for 34% of power generation. Pakistan has one of the lowest carbon emissions, just 19% of the world s average. Potential coal reserves in Pakistan may generate 100,000 MW of power for 350 years. Globally, coal-based power plants generate 40% of power, but account for just 0.07% of generation in Pakistan.

Approved Funds
Ordinary capital resources [USD 840,000]
Asian Development Fund [USD 30,000]
Ordinary capital resources [USD 30,000]
Counterpart [USD 450,000]
TOTAL [USD 1,350,000]

More related documents from ADB:
47094-001: Jamshoro Power Generation Project | Asian Development Bank
includes:

• Urdu translated PDS
• Initial Poverty and Social Analysis
  
• Resettlement Planning Documents
  
• Environmental Assessment and Measures

 

[Counter-Errorist]

U.S. pressured to block proposed coal-fired power plant for Pakistan
FINANCE: U.S. pressured to block proposed coal-fired power plant for Pakistan -- Monday, December 9, 2013 -- www.eenews.net

The Obama administration faces the first test of its pledge to oppose funding for overseas coal projects today when the Asian Development Bank (ADB) board decides on $900 million for a coal plant in Pakistan.

Environmentalists have put pressure on the United States to vote against the plant instead of merely abstaining, as countries often do before the multilateral development bank boards when they oppose a project but also don't want to stand in the way of its ultimate approval.

The result of the vote, set to take place today at the ADB in Manila, was not known by press time in the United States this morning. But it comes at a difficult time for the United States, which is trying to build a better relationship with Pakistan amid tension over drone strikes in the region. At the same time, the Obama administration took a strong stand last month when it announced tough new climate change guidelines that limit what coal projects it will back financially through international financial institutions

The Jamshoro plant is part of a three-stage energy plan for Pakistan, he said, which includes improving efficiency and assisting with capacity building and tax collection. When it comes to energy generation, Tumiwa said, the ADB is focused in the short term on rehabilitating thermal and hydropower plants to promote efficiency; converting oil-fueled power plants to coal; and developing small and micro-power plants. In the medium and long term, he said, the energy plan for Pakistan includes the development of "highly efficient" coal plants as well as large hydropower and "domestic energy sources."

He argued that with feed-in tariffs still nonexistent in Pakistan and laws governing renewable energy needing much work, coal will continue to have a place in the country's energy growth.

In replacing oil with super-efficient coal burning, the ADB argues, the Jamshoro plant will reduce 500,000 tons of carbon dioxide emissions per year.

"I think looking to coal would be a wise decision," he said. Of the U.S. decision on Jamshoro, he said, "This would be a good thing to vote on. It probably would make sense to go forward with this."

 

[SBD-3]

That is almost a billion dollars! I can not imagine so much money spent only on conversion. Some thing does not seem right. There must also be some sort of plant upgradation in this cost. Otherwise....

It seems that there is, the original dependable generation capacity of JPW is 675MV with max capacity being 850MV at Jamshoro +187MV at Kotari.
Thermal Power Station Jamshoro ::...Jamshoro Power Company
Limited...::

 

[Imran Khan]

another bhikari project

 

[kaps]

That is almost a billion dollars! I can not imagine so much money spent only on conversion. Some thing does not seem right. There must also be some sort of plant upgradation in this cost. Otherwise....

900m $ not for conversion. All units will be new and are scheduled to be installed at new place close to existing plant.

 

[veekysingh]

another bhikari project

Aaise nahi bolte.

 

[Khan_patriot]

if only all these loans were used to actually get things get things done.....

 

[kaps]

When ADB provides a loan they supervise transparency and it can't be used for any other purpose. ADB or WB funding is better than IMF loans.