Pakistan could save an estimated $3.239 billion over the next 26 years by converting the Jamshoro Unit 01 power plant from imported coal to locally produced Thar lignite, according to the Ministry of Energy, as the government pushes to reduce reliance on imported fuels and expand the use of domestic energy resources.
A feasibility study prepared by Dornier Group and EY Parthenon found the proposed conversion to be technically feasible, economically viable and environmentally manageable. The shift is expected to generate foreign exchange savings of $2.113 billion by reducing dependence on imported coal.
The study estimated total net benefits of $3.239 billion over the life of the project, including $1.720 billion in gains for the power sector and $1.519 billion in government savings through lower interest costs on foreign borrowing. It said the project has a cost-benefit ratio of 1.8 and remains financially attractive under different scenarios.
According to the study, the conversion would require targeted engineering modifications rather than a complete boiler replacement, helping preserve the value of the existing ultra-supercritical facility. Capital expenditure for the conversion is estimated at $86.2 million, while total project cost is projected at $116.6 million.
Power Minister Sardar Awais Ahmed Khan Leghari was briefed on the findings of the study, which was prepared with support from K-Electric, Jamshoro Power Company Limited and the Private Power and Infrastructure Board. A steering committee held 38 meetings during the process, including 15 chaired by the minister.
The initiative is part of the prime minister’s power sector reform plan and is aimed at increasing the use of indigenous energy sources. Officials said the shift to Thar lignite would also support mine expansion in Tharparkar, create jobs and improve infrastructure in the region, while reducing exposure to volatility in international coal prices and exchange rates.
Following completion of the feasibility study, the government is expected to move toward implementation by seeking policy approvals, engaging lenders, securing regulatory clearances and preparing design verification and plant modification plans.
