ISLAMABAD, April 19: The government is negotiating for setting up a 5000mw coal-fired power generation plant in the country with American and German companies. The government was looking for new foreign investment in coal-fired power generation to overcome the shortage of electricity.

Official sources told Dawn that initial talks had held with M/s AES of the United States and M/s Hambic Company of Germany to set up a project as early as possible. Its estimated cost is $3.5-$5 billion.

Minister of State for Investment Omar Ghumman and Deputy Chairman Planning Commission Dr Akram Sheikh are leaving for Germany on April 28, to finalize negotiations with a company there. While more talks are being held with the AES in Washington and Islamabad.

“Both the companies have offered to set up each 5000mw of coal fired power plant at a price of 7 cents per Kilowatt hour, but we are insisting to have it at 2.5 cent per Kw,” said a senior official of the ministry of privatization and investment.

He said the government needed one 5000mw coal-fired plant and whoever gave a better tariff would be invited to set up the project.

The official said the two companies had offered to set up each 1000mw coal-fired power plant, but the government was asking them to go for 5000mw. It required a huge investment and the government would provide all necessary incentives and concessions to any foreign company interested in a coal-fired power plant, he said.

In reply to a question, he said it depended what kind of turbines and other equipment would be installed by a foreign company in case of an agreement. “Our understanding is that 5000mw of coal-fired power plant would cost $3.5 billion to $5 billion investment,” he added.