A Bankable Feasibility Study (BFS) presented to Federal Minister for Power Awais Leghari reveals that Pakistan will save $3.239 billion over 26 years by converting the Jamshoro power plant from imported coal to indigenous Thar coal. The savings include $2.113 billion in foreign currency. The study, prepared by Dornier Group and EY Parthenon, confirms the transformation is technically feasible, economically compelling, and environmentally manageable.
Steering Committee Oversight
To guide the initiative, the federal minister established a high-level steering committee that held 38 sessions to monitor and expedite the BFS completion. The project stems from the Prime Minister’s Power Sector Reform Plan and reflects the Ministry of Energy’s efforts to advance fuel indigenisation.
The BFS reports a cost-benefit ratio of 1.8x, favorable across all sensitivity scenarios. Total net benefits amount to $3.239 billion, comprising $1.720 billion in net benefits to the power sector—including generation cost savings of $1.051 billion and Thar mine expansion benefits of $669 million—plus $1.519 billion in government savings from reduced interest costs on foreign borrowings.
Foreign Currency and Balance of Payments Benefits
The project generates $2.113 billion in foreign currency savings, strengthening Pakistan’s balance of payments and reducing exposure to volatile international coal prices and exchange rate fluctuations. The required conversion CAPEX is estimated at $86.2 million, with a total project cost of $116.6 million, offering a highly attractive return on investment.
According to the BFS, Jamshoro Unit-01—Pakistan’s ultra-supercritical power plant—can be converted to burn 100% Thar lignite through targeted engineering modifications rather than a large-scale boiler retrofit, preserving the existing plant asset. The project is a bankability-led brownfield modification with a stage-gate implementation approach that introduces no new coal capacity.
Transformative Economic Co-Benefits
Beyond direct financial savings, the conversion will catalyse expansion of coal mines in Tharparkar, generating employment and accelerating infrastructure development in one of Pakistan’s most underserved regions. By eliminating reliance on imported coal, Pakistan moves toward energy self-sufficiency, consistent with the Government’s indigenisation agenda under the Power Sector Reform Plan.
With the BFS formally presented, the Ministry of Energy (Power Division) will proceed to the implementation readiness phase. Immediate next steps include obtaining final policy approval, initiating the lender-consent workstream and loan amendment roadmap, preparing consent and contract matrices for NEPRA, TCEB, SEPA, PPRA, PPA, CSA, and EPC, launching basic design tender verification—including CFD modelling, mill tests, FGD/ESP and balance-of-plant modifications, and HAZIG/HAZOP studies—and developing a comprehensive procurement and contracting strategy with appropriate interface allocation and guarantees.
The government of Pakistan remains committed to the timely and bankable implementation of this landmark project, which represents a cornerstone of the national energy sector’s transition towards indigenous resources, fiscal sustainability, and long-term energy security, the spokesman for Power Division said.
