Thar lignite switch at Jamshoro to unlock over $3bn in savings

June 23, 2026 (MLN): Pakistan stands to save $3.239 billion over 26 years  including $2.113 billion in foreign currency  by converting the Jamshoro Unit-01 power plant from imported coal to 100% indigenous Thar lignite.

A Bankable Feasibility Study (BFS) presented to Federal Minister for Power Sardar Awais Ahmed Khan Leghari confirmed on Tuesday, according to a press release issued.

The BFS, prepared by Dornier Group as lead technical consultant and EY Parthenon, found the conversion technically feasible, economically compelling, and environmentally manageable.

It delivers a cost-benefit ratio of 1.8x across all sensitivity scenarios, with total net benefits comprising $1.720 billion to the power sector  including $1.051 billion in generation cost savings and $669 million in Thar mine expansion benefits and $1.519 billion in government savings from reduced interest costs on foreign borrowings.

The conversion capital expenditure is estimated at $86.2 million, with total project cost of $116.6 million.

The initiative flows from the Prime Minister's Power Sector Reform Plan and was supported by K-Electric, Jamshoro Power Company Limited, and the Private Power and Infrastructure Board.

A high-level steering committee convened 38 dedicated sessions to oversee the BFS, 15 of which were personally chaired by Minister Leghari.

The BFS confirms that Jamshoro Unit-01 Pakistan’s ultra-supercritical power plant  can be converted through targeted engineering modifications rather than a large-scale boiler retrofit, preserving the value of the existing asset.

The project is structured as a bankability-led brownfield modification that introduces no new coal capacity.

Beyond direct savings, the conversion is expected to catalyze mine expansion in Tharparkar, generating employment and accelerating infrastructure development in one of Pakistan's most underserved regions, while reducing exposure to international commodity price volatility and supply chain disruptions.

With the BFS formally presented, the Ministry of Energy will move to the implementation readiness phase, with immediate next steps including final policy approval, lender-consent workstreams, regulatory clearances from NEPRA, TCEB, SEPA, and PPRA, and launching basic design tender verification covering CFD modelling, mill tests, FGD/ESP modifications, and HAZOP studies.

Copyright Mettis Link News