The project is one of the most expensive among an array of ambitious energy developments that China is helping the country to build as part of a $55 billion economic partnership. A $3.5 billion joint venture between the neighbors will extract coal to generate 1.3 gigawatts of electricity that will be sent across the country on a new $3 billion transmission network.
On paper, Pakistan could be one of Asia’s top economies, with almost 200 million people spread over an area twice the size of California, from the ice-bound peaks of the Karakorum to the warm, dry shores of the Arabian Sea. But it remains hobbled by corruption, political turmoil, terrorism and poverty, all underpinned by a crippling shortage of energy.
The country has natural gas reserves, four nuclear-power stations and the world’s largest dam. Some 700 kilometers north of the Thar mine another Chinese company is helping build a solar farm eight times the size of New York’s Central Park. Yet power outages remain a way of life with blackouts of 12 hours or more even in Karachi and Islamabad. By one estimate, the shortage of electricity is wiping 2 percentage points off economic growth every year.
Thirst for energy is taking Pakistan in the opposite direction of Western countries that are trying to reduce coal power, or use cleaner-burning fuel and technologies. Germany, which still relies on coal-fired stations for two fifths of its electricity, has promised to switch half of them off by 2030.
Pakistan by contrast relies on coal for just 0.1 percent of its power, according to the Pakistan Business Council. The Thar projects and others could see that jump to 24 percent by 2020, according to Tahir Abbas, analyst at Karachi-based brokerage Arif Habib Ltd.
Pakistan’s coal reserves would give the nation a cheap domestic alternative to expensive oil and gas imports. The nation spends about $8 billion a year on imported petroleum and is one of the region’s biggest buyers of liquefied natural gas.