Pakistan is poised to save $3.239 billion over the next 26 years, $2.113 billion of it in foreign currency alone, by converting the Jamshoro Unit-01 power plant from imported coal to 100% indigenous Thar lignite.
According to a Bankable Feasibility Study (BFS) prepared by Dornier Group and EY Parthenon and presented to Power Minister Awais Leghari, this transformation is not only technically feasible and economically compelling but also environmentally manageable.
The achievement of this milestone was made possible through the active support and collaboration of key stakeholders, including K-Electric (KE), Jamshoro Power Company Limited (JPCL), and the Private Power and Infrastructure Board (PPIB). To steer this complex initiative, the minister constituted a high-level steering committee, which convened 38 dedicated sessions to proactively monitor and expedite the completion of the BFS. Of these, Leghari personally chaired 15 sessions, reflecting the government’s unwavering commitment to this transformative project. The minister has expressed his sincere gratitude to KE, JPCL, PPIB, and all other partners for their invaluable support in bringing this feasibility study to fruition.
The initiative flows directly from the Prime Minister’s Power Sector Reform Plan and reflects sustained efforts by the Ministry of Energy to advance fuel indigenization, with the BFS marking a key milestone in that process.
The economic case for the conversion is exceptionally strong. The project delivers a cost-benefit ratio of 1.8x, which remains favorable across all sensitivity scenarios. Total net benefits over the 26-year project life 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, as well as $1.519 billion in government savings from reduced interest costs on foreign borrowings.
Critically, the project generates $2.113 billion in foreign currency savings, directly 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 total project cost of $116.6 million), representing a highly attractive return on investment.
The BFS, prepared by the internationally renowned Dornier Group as lead technical consultant, confirms that Jamshoro Unit-01 can be converted to burn 100% Thar lignite through targeted engineering modifications rather than a large-scale boiler retrofit, thereby preserving the value of the existing plant asset. The project is structured as a bankability-led brownfield modification, with a stage-gate implementation approach that introduces no new coal capacity.
Beyond the direct financial savings, the conversion carries transformative economic co-benefits for Pakistan. The shift to Thar lignite will catalyze the expansion of coalmines in Tharparkar, generating employment, accelerating infrastructure development in one of Pakistan’s most underserved regions, and deepening the country’s domestic energy supply chain. By eliminating reliance on imported coal—subject to international commodity price fluctuations, foreign exchange volatility, and supply chain disruptions—Pakistan will move decisively towards energy self-sufficiency, consistent with the government’s broader indigenization agenda under the Power Sector Reform Plan.
With the BFS now 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 the NEPRA/TCEB/SEPA/PPRA/PPA/CSA/EPC consent and contract matrix, launching basic design tender verification 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.