Why Is China Funding Unsustainable Coal Projects In Pakistan?

Chinese investments in Pakistan through the much-vaunted China-Pakistan Economic Corridor (CPEC) were revised upwards, from $46 billion to a whopping $62 billion. The project, part of China’s ambitious Belt and Road initiative to invest in trade routes from Asia to Europe, has huge implications for Pakistan’s development prospects.

As part of CPEC, Beijing plans to build new industrial parks, railways, and roads to link its Xinjiang region with Pakistan’s port city of Gwadar. But instead of giving cause for celebration, the colossal Chinese investments heading to Pakistan have sparked massive protests from locals and environmentalists. Why? Because of Beijing’s senseless decision to use part of the funds to build out dated coal power plants.

Since Pakistan boasts more than 175 billion tonnes of coal (equal to Saudi Arabia’s oil deposits in terms of heating value), harnessing its energy reserves is crucial to ensure the country’s economic development. Currently, Islamabad only generates 0.1 percent of its energy needs from coal, relying on expensive coal and LNG imports, as well as 4 nuclear power plants and substantial hydroelectric dams to power its economy. However, instead of opting for cutting edge technology, the Chinese decided to build 10,000 MW worth of subcritical coal-fired plants (sub-CPC), an obsolete way of burning coal that ranks among the most polluting ways of generating energy.

Make no mistake, with Pakistan’s energy crisis reaching a tipping point – with a shortfall estimated at 4,000 MW and over 140 million Pakistanis lacking reliable access to electricity – China’s intervention couldn’t have come at a more opportune time. The majority of rural households in the country still lack access to conventional energy sources and power their homes and businesses with unreliable materials like kerosene, firewood and plant waste. This causes frequent blackouts, which in turn impact quality of life and are estimated to shave up to 2 percent off GDP growth every year.

Source – oilprice.com