ISLAMABAD: The Pakistani government has decided that only Thar coal would be used for coal-based power generation in the future and all conversions of existing and construction of new power projects would be designed on Thar coal specifications.

The landmark policy decision was taken by Prime Minister Raja Pervez Ashraf, while chairing a meeting of the Thar Coal and Energy Board at the Prime Minister’s Secretariat here on Wednesday.

The meeting was informed that the Sindh Engro Coal Mining Company (SECMC) and the Engro Corporation were working on an integrated coal mine and a power project with an estimated cost of 1.3 billion dollars at Block 2 of Thar coal project for mining of 6.5 million tons of coal per annum and a power plant of 1200 MW.

The prime minister also decided in principle to provide a sovereign guarantee to SECMC, a joint venture of the Sindh government and Engro Power, and directed the finance ministry to arrange the same.

Prime Minister Ashraf said that in the present financial situation, there was little space for providing sovereign guarantees. However, this is a strategic decision which has to be taken for meeting the growing energy requirements of the country, he stressed.

The Sindh government had requested the federal government that the conversion of the existing 800 MW and new 600 MW power plants at Jamshoro be designed on Thar Coal specifications.

The prime minister directed the ministry of water and power to sign within a week a Coal Off-Take agreement between the GENCO and the SECMC for the Asian Development Bank financed conversion of the existing 800 MW and new 600 MW thermal power projects at Jamshoro.

“Today we have laid the foundation of an energy policy, which is based on our indigenous resources and will lead to savings of huge foreign exchange presently being spent on the import of fossil fuels to run our thermal power plants,” said the prime minister.

The policy decision will ensure energy security that has been eluding us for such a long time, added the prime minister.

The Thar coal field is estimated to have reserves of 175 billion tons, 68 times higher than Pakistan’s total gas reserves.

Those who attended the meeting included Sindh Chief Minister Syed Qaim Ali Shah, Finance Minister Dr Abdul Hafeez Shaikh, Water and Power Minister Chaudhry Ahmed Mukhtar, PM’s Advisor on Petroleum Dr Asim Hussain, and others.