The loan will fund construction of the 404-megawatt Uch-II power project in Dera Murad Jamali in Balochistan. It will be built on surplus land at the existing Uch-I site and will be developed by International Power Plc of the UK.
“Along with helping to address the current power shortfall, the project will tap an underused indigenous energy source to provide affordable electricity, which will help reduce expensive oil imports, relieve stress on foreign exchange reserves and support overall energy security,” said Michael Barrow, Director in the ADB’s Private Sector Operations Department.
The power deficit is weighing heavily on the country’s economy.
Regular outages affect all major urban centres, with shops and factories often closing early as a result of energy rationing.
The shortfall in supply has reached over 22 per cent of the country’s peak demand and the problem is set to worsen without new generating capacity.
ADB said it has played a pioneering role in attracting private capital to the power sector, including financing the country’s first private hydropower project and its first private wind power project.
The project will tap gas from the Uch field about 47 km from the site, with electricity supplied to the National Transmission and Dispatch Company under a 25-year take-or-pay power purchase agreement.
The facility will also lead to new jobs in Balochistan, with up to 800 jobs created during construction. The plant is expected to take 30 months to build, with the project due for completion in September 2013.
Published in The Express Tribune, January 19th, 2011.
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