ISLAMABAD: The Islamic Development Bank (IDB) has approved a loan of $220 million for the Jamshoro coal power plant, it was officially learnt on Saturday.
The loan was approved by IDB’s board of executive directors at its meeting which started on March 23. The IDB’s approvals were mainly in the energy sector with a total of $490m in Pakistan, Morocco, Senegal, Mauritania and Cameroon.
The Asian Development Bank has already approved $900m for the project, whereas $380m will be contributed by the government to meet the overall estimated project cost of $1.5 billion.
Chronic power shortages have often caused social unrest, and cost the country about 2 per cent of its gross domestic product growth each year.
The 600MW supercritical coal-fired power generation plant, using an 80/20 blend of imported sub-bituminous coal and domestic lignite when available, will be in accordance with international and national environmental standards.
Pakistan has been facing rising oil prices and declining gas reserves as well as tight foreign account situation, rendering the reliance on the import of oil to fuel power plants increasingly unaffordable.
The country spends more than $14bn per year on importing oil, a major part of which goes into power generation.