Large majority of committed power projects not affordable, says minister

ISLAMABAD: Minister for Power, Sardar Awais Leghari, has claimed that out of the total 17,000 MW of new projects committed over the next 10 years, only 87 MW adhere to the least-cost methodology, while the remaining projects are expensive.

He was speaking at the 4th International Hydropower Conference 2025 here, which was attended by numerous experts and parliamentarians.

Leghari emphasized that if any project is deemed strategic and essential for the country, the additional costs, beyond the least-cost principle, should be financed by both federal and provincial governments through the Public Sector Development Program (PSDP). He questioned why these additional costs are being passed on to consumers.

Talks with Chinese IPPs initiated, says Leghari

He also raised concerns about whether Pakistan truly needs power from the Diamer Bhasha Dam, along with its $3 billion transmission line.

“Can I afford the cost of electricity from this project? Can the consumers bear the burden of these costs?” he further questioned.

He noted that once hydropower generation from the Diamer Bhasha project begins, its cost will increase by Rs 5 per unit.

“We have decided in principle that only new, least-cost projects will be included in the IGCEP,” Leghari stated, adding that it is still unclear whether the Central Power Purchasing Agency (CPPA-G) is solely responsible for purchasing power from these projects. He also confirmed that the Competitive Trading Bilateral Contract Market (CTBCM) will be operational from March of this year, facilitating the trade of electricity.

Senator Sherry Rehman, speaking at the conference, emphasized that sustainable and affordable energy is essential for the country’s development. “Pakistan has immense hydropower potential,” she stated, highlighting that every household and business in the country depends on affordable and sustainable energy. She pointed out that global conflicts often disrupt energy supply chains and added, “Pakistan has been heavily reliant on imported fossil fuels, but it’s time to switch to renewable energy sources like wind and solar. This shift will not only help reduce carbon emissions, the primary cause of global warming, but also ensure energy security.”

Dr. Shah Jehan Mirza, Managing Director of the Private Power and Infrastructure Board (PPIB), revealed that while Pakistan has an identified hydropower potential of 64,000 MW, only 11,000 MW is currently being utilized. He explained that although hydropower projects offer significant benefits, they typically take 7-8 years to complete, and lenders are often reluctant to finance such large-scale initiatives. However, he commended the government’s success in attracting substantial investment in the power sector, citing the Karot and Sukki Kinari hydropower projects as examples. Dr. Mirza added that Pakistan is performing well, with green energy accounting for 52% of its total energy mix. The government also plans to phase out old thermal plants with a combined capacity of 7,000 MW.

Malaysian High Commissioner Dato’ Mohammad Azhar Mazlan praised the conference organizers and stressed that energy is the backbone of a country’s economy.

Tanveer Mujahid, General Manager of WAPDA, underscored the importance of clean and green energy for the country’s development.

Hafiz Isahak, CEO of TNB REMACO, shared his organization’s expertise in providing maintenance, repair, diagnostic, and project management services for the power sector in Malaysia and other countries, including Kuwait and Saudi Arabia. He also cited examples of their partnerships in Pakistan, such as the Balloki Combined Cycle Power Plant (1,223 MW) and the New Bong Escape Hydropower Plant (84 MW).

Other speakers, including Wang Huihua, General Manager of China International Group Company; Dr. Jehanzeb Nasir; Ch. Abdul Rasheed, Minister for Hydel & Power in Azad Jammu & Kashmir (AJK); Azam Joya, General Manager of C&M Water; Dr. Irfan Yousaf, CEO of MKAI Climate Consulting; AVM Ijaz Malik, Disaster Management Specialist; and Zafar Iqbal Wattoo, RHC, addressed the prospects and challenges facing hydropower projects in Pakistan.

Copyright Business Recorder, 2025