Investor Presentaiton

89 ANNUAL REPORT P Private Power and Infrastructure Board ANNUAL REPORT Private Power and Infrastructure Board Implementation of IPPs based on Imported Coal and RLNG The availability of sufficient electric power generation capacity is necessary to meet the load requirements. After facing a long period of electric power generation shortages, Pakistan has reached a stage where the installed power generation capacity is more than sufficient to the total demand of country in FY 2019-20. As per NEPRA's State of Industry Report 2020, from 2016, till June 2020, a total of 13,298 MW electric power generation capacity was added to the power system of Pakistan. Such huge addition of megawatts played vital role in overcoming electricity shortage in the country. Historically, the pattern of electricity production to control the several cycles of electricity shortfalls has kept on changing markedly witnessing several distinct episodes, each characterized by one fuel type dominating the other in the total energy scenario. Last decade exposed energy deficient economy of Pakistan to high prices of furnace oil and depleting gas reserves; stretching further the gap between demand and supply of electricity. To overcome repeated cycles of shortfalls from country forever, three strata energy policy targeting short term, medium term and long term plans was adopted by the GoP which was operationally implemented by PPIB under the Power Generation Policy 2015 especially launched by the GoP to accommodate new fuels in the energy mix such as RLNG and Coal and to facilitate government funded projects under IPP mode for availing incentives, concessions and facilitation of PPIB as being provided to the IPPs in the private sector. The inside out approach adopted by PPIB was focused on boosting the indigenous fuel resources and diversifying the then prevailing energy mix while ensuring reliable and affordable generation of electricity. Thar coal, the abundant and mostly untapped indigenous natural resource lying dormant under the desert sands quickly became priority choice for power generation, however, initial studies and consultation conducted at different fronts suggested extended timelines before the first Thar coal mine and associated power plants could be materialized. Limited by options and the urgency of the stringent task at hand, short term option of establishing power plants based on imported coal with possibility of blending Thar coal upon its commercial availability was considered viable. The second phase called for promoting Thar coal based power plants fixated in medium to long term plans. Accordingly, before enforcing moratorium on imported coal, PPIB executed the plan and prioritized three imported coal based plants of 1,320 MW each power generation capacity at Port Qasim, Sahiwal and Hub while a 300 MW plant in Gwadar under the game changer China Pakistan Economic Corridor framework was also included in the plan to energize upcoming socio-economic activities going to take place in Gwadar and adjacent areas. 1400 1200 STATUS OF IMPORTED COAL BASED PROJECTS 1000 800 600 400 200 (Megawatts) Commissioned Commissioned Commissioned Under FC Sahiwal CPHGC Gwadar Port Qasim While considering shorter gestation period as compared to indigenous/Thar coal as well as hydropower projects of similar size, imported coal based projects capable of utilizing Thar coal upon its commercial availability were initiated to meet the country's immediate electricity shortfall and to serve as a reliable base load solution. Furthermore, in order to trade off the anticipated impact on foreign exchange reserves, numbers of hydro and local coal based projects were also prioritized in parallel to cater the electricity requirements with sustainability on long term basis. 90

View entire presentation