Pakistan plans to ask Chinese power plants in the country to switch from imported coal to local coal from Thar.
As per Reuters, this move aims to cut costs and ease the financial burden on Pakistan.
Pakistan's power minister, Awais Leghari, who will be part of the delegation visiting Beijing, mentioned that they will discuss structural reforms for the power sector, as suggested by the International Monetary Fund (IMF).
This is part of a larger effort to reform Pakistan's energy sector following a $7 billion bailout agreement with the IMF.
China has invested over $20 billion in Pakistan’s energy projects.
However, switching to local coal could save Pakistan around 200 billion rupees ($700 million) annually and reduce electricity costs by up to 2.5 rupees per unit.
Earlier this year, Engro Corporation sold its thermal assets, including Sindh Engro Coal Mining, to Liberty Power, due to foreign exchange issues and local coal potential.
Pakistan's energy sector faces challenges like power theft and distribution losses, leading to significant debt. The government aims to cut "circular debt" by 100 billion rupees ($360 million) annually through reforms.
Higher power tariffs from a previous IMF bailout have reduced household energy consumption, despite rising temperatures.
Leghari noted that high tariffs are driving households towards solar power alternatives.
Currently, about 1,000 megawatts from solar power are connected to the grid, and this capacity could be much higher.
