Powering Gwadar for the future

The China Pakistan Economic Corridor (CPEC) is poised to reshape the economic landscape of Pakistan in addition to opening multiple avenues for foreign direct investment. In this regard, Gwadar holds a pivotal importance. The development of Gwadar is sine qua non for Pakistan’s development.
Ever since the materialisation of CPEC, Gwadar has been able to gain significant importance in Pakistan’s political landscape. The representatives of Balochistan in Parliament have been raising a number of local issues out of which those related to Gwadar have either been resolved or are in the process of getting addressed. The ongoing construction of an international airport will not only help in providing access to potential investors or businesspersons but will serve as a gateway for tourism as well. Furthermore, the drinking water issue is in the process of getting resolved. In the meantime, the construction of a desalination plant has been catering to the increased demand for drinking water.
However, the city, often termed as the ‘Future of Pakistan’, faces a considerable power shortfall despite the inception of CPEC more than five years ago. The existing shortfall is going to act as an impediment for months and years to come with the increase in economic activities in the city. By 2030, the actual power demand will reach 778 MW against the current power supply of 142.5 MW. Therefore, it is important that Gwadar becomes self-sufficient in power generation to cater to not only its present and future energy needs but is also able to compensate for any power shortfalls across Balochistan through a national grid system.
Currently, the existing power supply to the Makran region is 142.5 MW. A large chunk of the power supply, approximately 104 MW, is imported from Iran. However, Iran’s power supply is not optimally available due to its own accelerating energy demand. The average supply from Iran hovers around 40-70 MW. Additionally, 30 MW is generated by captive or domestic generators and 8.5 MW by generators at the Gwadar Free Zone. This heavy reliance on Iran as the supplier for Gwadar’s power demands is strategically unreliable in addition to being a technical mismatch as well as incurring a high tariff.
Due to technical issues, Gwadar’s electricity network is different from the national grid system. It feeds Gwadar, Turbat and Panjgur with a meagre 35 MW. Consequently, 12-14 hours of load shedding is common in the area. On the other hand, if the Makran region, which includes Gwadar, is connected to Pakistan’s national grid system, it will not only be able to compensate for power shortfalls in Gwadar but will be able to contribute in satisfying existing power shortfall in all of Balochistan as well. Meanwhile, the current demand in the Gwadar region is about 247 MW.
In November 2017, the Joint Coordination Committee (JCC) meeting on CPEC proposed to review the Gwadar plan in order to deal with the power issue. Additionally, a separate high-level meeting occurred on the development of Gwadar’s 300MW coal power project which would satisfy power demands from Gwadar and Makran region. CIHC, as a leading industry investor, was tasked with creating this plant by both the governments. By September 2020, the CPEC Authority decided to finalise all pending matters for the signing of the Power Purchase Agreement for this project. It was mutually agreed that all matters related to the agreement shall be resolved internally, at the Power Division level, within a week. However, the progress on the project remains at a slow pace.
The availability of sustainable electricity is the main demand of industrialists who wish to establish themselves in Gwadar. However, the unavailability of power has forced several industrialists to abandon their planned investments in the region—depriving it of losses amounting to millions of rupees if not billions.
The Gwadar Port and Free Zone operation totally relies on China Overseas Ports Holding Company’s (COPHC) generators due to a lack of power supply. This has not only increased the operational cost of the project but has also negatively affected the functionality of the port and free zone development. It is already estimated that around 242 MW will be required for the Gwadar Free Zone. It is not possible to provide such an amount of power to the industries by COPHC’s generators by that time. Thus, in other words, the Port and Free Zone development is dependent on the schedule of the proposed coal power project.
The availability of power will usher economic activities in the region and consequently, generate job opportunities. The delay in the production of the Gwadar power plant is delaying the progress of Gwadar as a whole since potential investors await the availability of sufficient power supply in the region and ultimately fail to see value in such elongated investments without any benefit. Therefore, concerned authorities should prioritise this issue and take the necessary measures.