Pakistan Aims to Save Billions by Using Local Coal for Chinese Power Plants

Pakistan plans to switch Chinese power plants to local coal, which could save $700 million annually. The move coincides with IMF-backed structural reforms and a potential energy debt re-profiling with China. High power tariffs and shifting consumer demand to solar are critical challenges for the government.

Pakistan will request Chinese power plants to use local coal from the Thar region instead of imported coal, aiming to reduce energy costs. This aligns with Pakistan's broader efforts to revamp its indebted energy sector.

Energy Minister Awais Leghari disclosed the plan ahead of a Beijing visit, where the delegation will also discuss re-profiling energy sector debt as part of IMF-recommended structural reforms. China's investment in Pakistan's energy projects exceeds $20 billion.

The shift to local coal could save Pakistan over $700 million annually, easing pressure on foreign exchange reserves. However, the country faces challenges such as high power tariffs and declining consumer demand, with many turning to solar alternatives.

(With inputs from agencies.)