Pakistan and China have signed an agreement for the construction of $1.5 billion Matiari (Thar) and Lahore HVDC transmission line that will establish the much-needed north south link for the transfer of 4000 MW from Sindh to urban load centers of Punjab.
An official statement said the agreement was signed by Water and Power Secretary Younus Dagha and the State Grid Corporation of China chairman in Beijing. This will be first HVDC transmission line in Pakistan. The Chinese state owned firm will be making full investment for the project for recovery later on through the transmission tariff.
The signing was witnessed by the chief ministers of Sindh, Balochistan and Khyber Pakhtunkhwa, who were part of the official delegation led by Minister for Planning Ahsan Iqbal for attending the sixth meeting of the Joint Cooperation Committee of CPEC.
The project is part of early harvest CPEC projects. The National Electric Power Regulatory Authority (NEPRA) has already approved the tariff for the 878 kilometers long transmission line that has helped lowered its estimated construction cost from $2.1 billion to $1.5 billion.
The government agency, Private Power and Infrastructure Board (PPIB) on behalf of Chinese state owned firm had sought a tariff of Rs 1.16 per kw/h for the 25 year for the project. However, NEPRA after public hearing only approved Rs 0.76 per kw/h.
There were concerns in the official circles whether it was economically viable to construct a costly transmission line that will evacuated power generated from coal power projects (lowest in the generation order) in Sindh to load centers in Punjab where number of RLNG power plants (top priority in the official merit order for generation) are being constructed in the public sector.
However, the government addressed these concerns by submitting before NEPRA that most of the power generation on the local and imported coal would be done in the coastal areas around Sindh and Balochistan. They would be essential to meet the energy demands of urban load centers of Punjab and Khyber Pakhtunkhwa from mid to long term.
At present close to 5,000 MW power generation on local and imported coal is under construction in Sindh and Balochistan. The government also estimates 5,000 MW addition through wind power in the coastal areas of Sindh in next three to five years. If all this energy is generated then Pakistan will have to add another HVDC line to meet the requirements between north and south.
