Pakistan is set to save over $3.239 billion in 26 years after a feasibility study confirmed the conversion of Jamshoro Unit-01 from imported coal to Thar lignite, reducing fuel import dependence and strengthening energy security and foreign exchange stability.
The study, conducted by international consultants Dornier Group and EY Parthenon, was presented to Federal Minister for Power Sardar Awais Ahmed Khan Leghari, confirming the technical feasibility and economic viability of the project.
It concluded that the conversion to 100 percent Thar lignite would significantly reduce reliance on imported coal while generating substantial financial and macroeconomic benefits for the country.
According to the Power Division, the project is expected to deliver total net benefits of $3.239 billion over its operational life, including $1.720 billion in gains for the power sector and $1.519 billion in savings for the government through reduced interest costs on foreign borrowings.
The study further estimates foreign exchange savings of $2.113 billion, which officials say will help strengthen Pakistan’s balance of payments position and reduce exposure to international commodity price fluctuations and currency volatility.
The conversion will require a capital expenditure of around $86.2 million, with total project cost estimated at $116.6 million. The feasibility report also places the cost-benefit ratio at 1.8, remaining positive under multiple sensitivity scenarios.
Officials said the project aligns with the government’s broader energy reform agenda aimed at promoting fuel indigenisation and reducing dependence on imported energy sources.
The initiative has been developed through coordination among key stakeholders, including K-Electric, Jamshoro Power Company Limited (JPCL), and the Private Power and Infrastructure Board (PPIB), with oversight from a high-level steering committee that held 38 meetings during the study phase.
The committee was chaired by the Federal Minister for Power in 15 of those meetings, reflecting the strategic importance of the project.
The conversion will allow Pakistan’s only ultra-supercritical coal-fired power plant to operate on locally sourced Thar lignite through engineering modifications, without requiring a complete boiler replacement or adding new generation capacity.
Beyond financial savings, the project is expected to support expansion of coal mining in Tharparkar, generate employment opportunities, improve infrastructure development, and strengthen the domestic energy supply chain.
Officials say replacing imported coal with local lignite will help shield the power sector from global price shocks, foreign exchange risks, and supply disruptions while reinforcing long-term energy security.
Following completion of the feasibility study, the project will now move to implementation readiness, including regulatory approvals, lender consents, engineering verification, and procurement planning.
The government has reaffirmed its commitment to timely execution, terming the Jamshoro conversion a key step toward fiscal stability and indigenous energy development.
