China Signs Power Generation Deals With Pakistan


China has agreed to build several power plants in Pakistan to help the South Asian nation deal with its worsening electricity crisis. When completed over the next several years, these plants, including Nandipur (425 MW, Thermal), Guddu(800 MW, Thermal) and Neelam-Jhelum(1000 MW, Hydro), Chashma (1200 MW, Nuclear) will add more than 3000 MW of power generating capacity for the energy-hungry country. Pakistan is currently facing a deficit of 4,000 to 5,000 megawatts, resulting in extensive load-shedding of several hours a day.

China has already installed a 325-megawatt nuclear power plant (C1) at Chashma and is currently working on another (C2) of the same capacity that is expected to be online by 2010. The agreements for C3 and C4 have also been signed. The United States has objected to China supplying C3 and C4 on the grounds that any Pak-China nuclear cooperation would require consensus approval by the NSG, of which China is now a member, for any exception to the guidelines. The US is applying a double standards since it supported and got approval for such an exception from NSG for its own nuclear deal with India.

Under another agreement, China has agreed to invest about $600 million for setting up an integrated coal mining-cum-power project in Sindh. The project will produce 180 million tons of coal per year, which is sufficient to fuel the proposed 405 MW power plant. Pakistan is currently world's seventh largest coal-producing country, with coal reserves of more than 185 billion tons (second in the world after U.S.A.'s 247 billion tons). Almost all (99 percent) of Pakistan's coal reserves are found in the province of Sindh. Pakistan's largest coal field is Thar coal field which is spread over an area of 9100 square kilometers, and contains 175 billion tons of coal. So far this coal field has not been developed but efforts are underway.

The Export-Import Bank of China will lead the multi-national bank financing and China Export and Credit Insurance Corporation (Sinosure) will provide political risk and credit default insurance for the first 425 MW project at Nanipur, Gujranwala estimated to cost $329m, according to Associated Press of Pakistan. Other participating banks include BNP-Paribas, HSBC Bank plc, and CIC France. The lead contractor is China's Dongfang Electric Corporation Limited, with G.E. France as a sub-contractor.



Political risk has been rising in many developing nations, including the South Asian nations of Bangladesh, India, Pakistan and Sri Lanka (see 2008 political risk map). The cost of insurance against political and economic risk has also been going up, as the global economic crisis unfolds. Hong Kong-based Political & Economic Risk Consultancy Ltd. has recently rated India as the riskiest of 14 Asian countries, not including Pakistan and Afghanistan, it analyzed for 2009.

With their national coffers bulging and their exports driven economy slowing, the Chinese see opportunity in the developing world where others see political and economic risks. It is an opportunity for China to assure the continuing availability of raw materials and oil for its growing industries and to diversify its export markets. In addition to helping bail out the ailing US economy, China is using some of its vast cash reserves of $2 trillion to offer supplier financing as well as insurance for the non-Chinese partners to cover political and credit risk in the emerging markets. With bilateral trade volume of about $7 billion, Pakistan is only one example of Chinese interest. Others include politically-risky Afghanistan, and many nations of Sub-Saharan Africa where the Chinese are financing and building major infrastructure projects. In Afghanistan, China has committed nearly $2.9 billion to develop the Aynak copper field, including the infrastructure that must be built with it such as a power station to run the operation and a railroad to haul the tons of copper it hopes to extract. The Aynak project is the biggest foreign investment in Afghanistan to date, according to Reuters. The trade between Africa and China has grown an average of 30% in the past decade, topping $106 billion last year.

Looking at how the Chinese are working with many developing nations in Asia and Africa, it appears to be an unwritten Chinese policy to offer trade and investment in projects rather than direct cash aid. Given the rampant government corruption in many developing nations, including Pakistan, the Chinese policy is a sound one. It attempts to benefit the people and the nation more than the corrupt politicians and government officials who they must deal with.

Clearly, the Chinese objectives are not entirely altruistic. Their strategy is driven by enlightened self-interest in the developing world, which they see as source of commodities that their industries need as well as growing export market for their products and services. But the Chinese want to do good and do well at the same time by helping to lift people out of poverty in the developing world. By doing so, they want to be seen as friends and partners by the people in Asia, Africa and Latin America. The strategy enhances China's status as the new superpower that takes its global leadership role seriously.

Related Links:

Chinese Do Good and Do well in Developing World

World's Largest Solar Deals

Pakistan Inks Neelum-Jhelum Deal

Political Risk Insurance

Political and Economic Risk Consultancy

Pakistan's Electricity Crisis

Forget Chinindia! It's Chimerica to the Rescue!

Views: 478

Comment by Riaz Haq on November 26, 2013 at 9:44am

Here's NY Times on 2,200 MW nuclear power plant in Karachi:

“The beginning of the 2,200-megawatt power project is indeed a proud moment in the energy history of Pakistan,” Mr. Sharif said at the groundbreaking ceremony in the coastal city of Karachi, which the Chinese ambassador to Pakistan, Sun Weidong, and officials from Pakistan’s Atomic Energy Commission attended.

“For achieving the goal of energy, nuclear power will form an increasingly significant component,” Mr. Sharif said, adding that he was told by the Chinese officials that the project, Karachi Coastal Power Project (K-2/K-3), will be completed in six years.
----------
The cost of the new reactor project is estimated to be $9.59 billion, with China providing extensive construction help and expertise. Further, China will provide maintenance and enriched uranium for fuel.

---

China has signaled its intent to expand nuclear energy cooperation with Pakistan in joint statements from their leaders, Mr. Zhang said in a telephone interview.

“Both countries have expressed their willingness to expand cooperation in civilian nuclear energy,” he said. “In that sense, you didn’t need a crystal to see this project coming.”

China is almost certain to deem the new projects as a “grandfathered” extension of nuclear cooperation agreements signed with Pakistan before China joined the Nuclear Suppliers Group, meaning that China will not consider seeking approval for the reactors from the group, Mr. Zhang said. He said the major member states in the group, including the United States, also appeared unlikely to go beyond relatively restrained, formulaic expressions of concern about the new reactors.

“My analysis is that this issue won’t trigger too much controversy,” he said. “The Indian government will certainly respond, but I don’t think that this will fundamentally harm Sino-Indian relations, because it’s not something that has come out of the blue. China and India have exchanged views on this many times.”

On the supplier group’s likely response, Mr. Zhang said: “I don’t think the N.S.G. will formally raise this issue, because the experience in the past was that the members would reach an implicit understanding, and so this issue never caused a big fuss in previous N.S.G. meetings.”
---
“China’s supplies to Pakistan are under full I.A.E.A. safeguards,” said Mansoor Ahmed, a Pakistani analyst who is a visiting research scholar at the Cooperative Monitoring Center, Sandia National Laboratories, in Albuquerque, N.M. “However, the Chinese have chosen to ignore criticism with regard to the N.S.G. restrictions, which are subject to various interpretations, in view of the India-U.S. nuclear deal.”

Mr. Ahmed also stressed that the two reactors were being sold under a civilian nuclear cooperation framework concluded in 1986 before China becoming a party to the Nuclear Nonproliferation Treaty in 1992 and the N.S.G. in 2004. “Therefore, the Chinese don’t need N.S.G. approval for the sale of new reactors in spite of Indian protests,” he said.

Mr. Sharif on Tuesday also announced plans to build six more civilian nuclear plants in other parts of the country. But Mr. Zhang said that China was unlikely to build any more nuclear reactors in Pakistan beyond the two units in Karachi.

The choice of Karachi is significant as it is considered Pakistan’s economic and trade center. “Today people look with envy toward cities like Dubai, Hong Kong, Kuala Lumpur and Singapore,” Mr. Sharif said in his speech, which was broadcast live on state-run television.

“I wish to see Karachi in this list of harbors and industrial hubs.”

http://www.nytimes.com/2013/11/27/world/asia/pakistan-breaks-ground...

Comment by Riaz Haq on December 24, 2013 at 9:24am

Here's Reuters on China financing nuclear power plants in Karachi:

China has committed $6.5 billion to finance the construction of a major nuclear power project in Pakistan's port city of Karachi as it seeks to strengthen ties with its strategic partner, Pakistani officials said.

Pakistani Prime Minister Nawaz Sharif broke ground on the $9.59 billion project last month but officials have provided few details of how they plan to finance it.

Financing documents seen by Reuters showed China National Nuclear Cooperation (CNNC) has promised to grant a loan of at least $6.5 billion to finance the project which will have two reactors with a capacity of 1,100 megawatts each.

Two members of the government's energy team and three sources close to the deal confirmed this. CNNC was not available for comment.

"China has complete confidence in Pakistan's capacity to run a nuclear power plant with all checks in place," said Ansar Parvez, chairman of the Pakistan Atomic Energy Commission which runs the civilian nuclear program.

"As things stand, the performance and capacity of nuclear power plants in Pakistan is far better compared to non-nuclear plants."

Parvez declined to give more details of the funding but said it would be completed by 2019 and each of the two reactors would be larger than the combined power of all nuclear reactors now operating in Pakistan.

As part of the deal, China has also waived a $250,000 insurance premium on the loan, said two sources in the Energy Ministry with knowledge of the project. They declined to be identified as they are not authorized to speak to the media about the financing.

Pakistan and China, both nuclear-armed nations, consider each other close friends and their ties have been underpinned by common wariness of India and a desire to hedge against U.S. influence in South Asia.

Pakistan sees nuclear energy as key to its efforts to solve power shortages that have crippled its economy. Pakistan generates about 11,000 MW of power while total demand is about 15,000 MW.

Blackouts lasting more than half a day in some areas have infuriated many Pakistanis and sparked violent protests, undermining an economy already beset by high unemployment, widespread poverty, crime and sectarian and insurgent violence.

Under its long-term energy plan, Pakistan hopes to produce more than 40,000 MW of electricity through nuclear plants by 2050.

The United States sealed a nuclear supply deal with India in 2008, irking both China and Pakistan....

http://www.reuters.com/article/2013/12/24/us-pakistan-china-nuclear...

Comment by Riaz Haq on January 20, 2014 at 9:05am

Here's a Wall Street Journal story on Pakistan in talks to acquire 3 more large nuclear power plants in addition to 2 recently announced for Karachi:

ISLAMABAD, Pakistan—Pakistan is in talks with China to acquire three large nuclear power plants for some $13 billion, Pakistani officials said, in a further blow to international efforts to restrict the trade in nuclear technology.

The deal is in addition to last year's agreement to build two Chinese reactors in Pakistan's southern port of Karachi.

The agreement, if reached, would help plug the crippling gap in Pakistan's electricity supply and cement its strategic regional alliance with China, which is aimed against mutual rival India. Alarming Washington, the China-Pakistan nuclear trade bypasses international rules against nuclear exports to countries—like Pakistan—that have not signed the Non-Proliferation Treaty.

Negotiations are going on currently with China "for three more plants," Prime Minister Nawaz Sharif told his cabinet's meeting this month, according to those present.

The three Chinese reactors would likely be located in the center of the country, in Punjab province, at a site now being prepared, officials said. Two advanced 1,100-megawatt reactors from China are already due to be built near the southern port of Karachi, under a $9 billion agreement completed last year. Mr. Sharif led the groundbreaking ceremony for the Karachi reactors in November but the discussions about the additional plants have not been made public until now.
-------------

Mark Hibbs, an expert on nuclear issues at the Carnegie Endowment for International Peace, an independent research organization based in Washington, said that the Nuclear Suppliers Group was "clearly in a crisis that has continued to escalate" as a result of the trade taking place with India and Pakistan. The rules of the group had no binding force, as it is a voluntary arrangement, he said.
--------

Pakistan produces between 12,000 MW and 14,000 MW of electricity, while demand is at least 18,000 MW, according to the ministry of power, causing hours of power outages every day across the country. Demand is set to rise sharply with the ballooning population.

Nuclear energy provides just 750 MW of power currently, through two Chinese-built 330 MW plants at Chashma, in Punjab province, and a tiny, aged, plant outside Karachi. China is currently building two more plants of the same size at Chashma, boosting nuclear output to 1,400 MW by 2016. The plan for the future is to acquire much larger 1,100 MW plants from China, including the two new reactors for Karachi.
-------------

Ansar Parvez, chairman of the Pakistan Atomic Energy Commission, which builds and runs the country's nuclear power plants, said that the country's aim is to generate 8,800 MW of nuclear power by 2030.
------------
That target requires Pakistan to build six to seven large nuclear power plants, including the two already scheduled for Karachi. Each such plant costs $4 billion to $4.5 billion, said Mr. Parvez.

----
A spokeswoman for China's Foreign Ministry, Hua Chunying, defended the countries' nuclear cooperation in December, which she said was in accordance with the countries' international obligations.

"In the future, the Chinese side wishes to continue offering help to the best of its ability to resolve the electricity-shortage issue," Ms. Hua had said.

http://online.wsj.com/news/articles/SB10001424052702304757004579332...

Comment by Riaz Haq on February 26, 2014 at 8:30am

LAHORE: Chief Minister Punjab Shahbaz Sharif has stated that China had shown willingness to invest $30 billion in the energy sector in Pakistan, Geo News reported.

In an exclusive interview with Geo News programme Aaj Kamran Khan Kay Sath, Shahbaz Sharif said China would provide the historic assistance of $30 billion for power generation in the country, however, Pakistan would identify the projects.

http://www.thenews.com.pk/article-139040-China-to-invest-$30bn-in-energy-sector-in-Pakistan

Comment by Riaz Haq on June 19, 2019 at 7:21am

Outer dome installed at Karachi 2

18 June 2019

The outer safety dome has been installed on the containment building of unit 2 at the Karachi nuclear power plant in Pakistan. The unit is the first of two Chinese-supplied Hualong One reactors being built at the site.

https://www.world-nuclear-news.org/Articles/Outer-dome-installed-at...

The steel dome - measuring about 53 metres in diameter and over 23m in height, and weighing about 366 tonnes - was placed upon the top of the containment building walls at 8:06am yesterday, China National Nuclear Power (CNNP) has announced.

The Hualong One uses a double-layer safety shell design. Together with the inner protective dome, the outer dome protects the reactor and prevents the release of radioactive materials into the environment in the event of a serious accident.

"The successful hoisting of the outer safety dome has marked the end of the main structural project of the nuclear power plant, which has created favourable conditions for the overall test and thermal test of the subsequent containment," CNNP said.

Karachi 2 and 3 are the first export of China's Hualong One design, with construction of unit 2 beginning in 2015 and unit 3 in 2016. Installation of the reactor internals at unit 2 was completed in January this year. The units are scheduled for commercial operation in 2021 and 2022, respectively.

In addition to the two units under construction in Pakistan, four Hualong One units are being built in China. China National Nuclear Corporation is constructing two units at its Fuqing plant in Fujian province, while China General Nuclear (CGN) is building two at its Fangchenggang site in Guangxi province. All four units are expected to enter commercial operation in 2019-2020.

CGN proposes to use a UK version of its Hualong One design - the HPR1000 - at a prospective new nuclear power plant at Bradwell, England.

Comment by Riaz Haq on July 4, 2019 at 9:54am

Steep decline in #nuclearpower threatens energy security and #climate goals. , At 10% of all #electricity generated globally, #nuclear is the 2nd largest source of low-#carbon #energy after #Hydro which produces 16% of electricity. https://www.iea.org/newsroom/news/2019/may/steep-decline-in-nuclear... via @IEA

With its mission to cover all fuels and technologies, the IEA hopes that the publication of its first report addressing nuclear power in nearly two decades will help bring the topic back into the global energy debate. The report is being released during the 10th Clean Energy Ministerial in Vancouver, Canada.

“Without an important contribution from nuclear power, the global energy transition will be that much harder,” said Dr Fatih Birol, the IEA’s Executive Director. “Alongside renewables, energy efficiency and other innovative technologies, nuclear can make a significant contribution to achieving sustainable energy goals and enhancing energy security. But unless the barriers it faces are overcome, its role will soon be on a steep decline worldwide, particularly in the United States, Europe and Japan.”

The new report finds that extending the operational life of existing nuclear plants requires substantial capital investment. But its cost is competitive with other electricity generation technologies, including new solar and wind projects, and can lead to a more secure, less disruptive energy transition.

Market conditions remain unfavourable, however, for lengthening the lifetimes of nuclear plants. An extended period of low wholesale electricity prices in most advanced economies has sharply reduced or eliminated profit margins for many technologies, putting nuclear plants at risk of shutting down early.

In the United States, for example, some 90 reactors have 60-year operating licenses, yet several have already retired early and many more are at risk. In Europe, Japan and other advanced economies, extensions of plants’ lifetimes also face uncertain prospects.

Investment in new nuclear projects in advanced economies is even more difficult. New projects planned in Finland, France and the United States are not yet in service and have faced major cost overruns. Korea has been an important exception, with a record of completing construction of new projects on time and on budget, though government policy aims to end new nuclear construction.

A sharp decline in nuclear power capacity in advanced economies would have major implications. Without additional lifetime extensions and new builds, achieving key sustainable energy goals, including international climate targets, would become more difficult and expensive.

If other low-carbon sources, namely wind and solar PV, are to fill the shortfall in nuclear, their deployment would have to accelerate to an unprecedented level. In the past 20 years, wind and solar PV capacity has increased by about 580 gigawatts in advanced economies. But over the next 20 years, nearly five times that amount would need to be added. Such a drastic increase in renewable power generation would create serious challenges in integrating the new sources into the broader energy system. Clean energy transitions in advanced economies would also require $1.6 trillion in additional investment over the same period, which would end up hurting consumers through higher electricity bills.

Comment by Riaz Haq on July 4, 2019 at 10:07am

Pakistan Nuclear Power Profile

https://cnpp.iaea.org/countryprofiles/Pakistan/Pakistan.htm

Energy supply statistics are given in Table 2. During the past decade (2007–2017), indigenous oil production has been at a level of about 64 000–95 000 barrels per day (equivalent to about 17–21% of the country’s oil consumption). Pakistan’s natural gas production in fiscal year 2016–17(1) was 4 032 million cubic feet per day.

In 2016–2017, coal production was 4.2 million t, while 7 million t of coal was imported to meet the industrial requirements of the country. The development of the coal mining industry in Pakistan, particularly for power generation, is hampered by constraints relating to the quality of coal, mining difficulties and other organizational constraints.

In 2016–2017, hydropower provided 26% of the electricity in Pakistan. Additional hydro projects varying in size, ranging from medium to micro, are under construction and the capacity of some existing hydro projects is being extended. Meanwhile, there are medium and large hydroelectric projects, awaiting official decision, are either proposed or are being planned.

Nuclear power generation contributed 6.2% to the total electricity generation of Pakistan in 2017. At present, the country has five operational nuclear power plants that have a cumulative generating capacity of 1 430 MW, while two reactors are under construction.

-------------------

Pakistan started construction of its first nuclear power plant, KANUPP, in 1966 in Karachi. The plant was connected to the national grid on 18 October 1972. KANUPP, a pressurized heavy water reactor of 137 MW gross capacity was constructed by Canadian General Electric under a turnkey contract. In 1976, vendor support for spare parts and fuel was withdrawn. The PAEC undertook the task of indigenously manufacturing the required spare parts and nuclear fuel on an emergency basis and, since 1980, KANUPP has successfully operated using fuel manufactured by the PAEC.

Despite the keen interest of Pakistan in building additional nuclear plants, it took more than two decades before the second nuclear power plant started construction. This delay was due to Pakistan’s lack of access to international nuclear technology coupled with a lack of indigenous industrial infrastructure. The construction of Pakistan’s second nuclear plant, C-1, a pressurized water reactor (PWR), was made possible in 1993 with the help of the China National Nuclear Corporation (CNNC). The plant was connected to the national grid on 13 June 2000 and has a gross capacity of 325 MW. A third nuclear power plant, C-2, with 325 MW gross capacity started commercial operation on 18 May 2011. The fourth unit, C-3, started commercial operation on 6 December 2016. It has a gross capacity of 340 MW and a similar plant, C-4, sited beside C-3, was connected to the grid on 25 June 2017. The first concrete pours to mark the start of construction of Karachi Coastal Power Project, a project containing two nuclear units, K-2 and K-3 (1100 MW each), based on an improved PWR design, were 20 August 2015 and 31 May 2016, respectively.

Comment

You need to be a member of PakAlumni Worldwide: The Global Social Network to add comments!

Join PakAlumni Worldwide: The Global Social Network

Pre-Paid Legal


Twitter Feed

    follow me on Twitter

    Sponsored Links

    South Asia Investor Review
    Investor Information Blog

    Haq's Musings
    Riaz Haq's Current Affairs Blog

    Please Bookmark This Page!




    Blog Posts

    Pakistani Student Enrollment in US Universities Hits All Time High

    Pakistani student enrollment in America's institutions of higher learning rose 16% last year, outpacing the record 12% growth in the number of international students hosted by the country. This puts Pakistan among eight sources in the top 20 countries with the largest increases in US enrollment. India saw the biggest increase at 35%, followed by Ghana 32%, Bangladesh and…

    Continue

    Posted by Riaz Haq on April 1, 2024 at 5:00pm

    Agriculture, Caste, Religion and Happiness in South Asia

    Pakistan's agriculture sector GDP grew at a rate of 5.2% in the October-December 2023 quarter, according to the government figures. This is a rare bright spot in the overall national economy that showed just 1% growth during the quarter. Strong performance of the farm sector gives the much needed boost for about …

    Continue

    Posted by Riaz Haq on March 29, 2024 at 8:00pm

    © 2024   Created by Riaz Haq.   Powered by

    Badges  |  Report an Issue  |  Terms of Service