Two coal-fired power plants with total capacity of 1650 Megawatts will be built in Hub, Balochistan and in Thar, Sindh, under the China-Pakistan Economic Corridor (CPEC) initiative.

Documents relating to the Power Purchase Agreement and Implementation Agreement were signed in Islamabad last week, between China Power Hub Generation Company, a joint venture between China Power International and HUBCO, and the Private Power Infrastructure Board. HUBCO is a major Pakistani Independent Power Producer and is listed on the Pakistan Stock Exchange.

Local press said that the minister for water and power, Khawaja Muhammad Asif, was also present. Describing the projects as a major milestone, he said that the government is giving preference to local coal from Thar to generate cheap electricity. The two pilot projects will open up new chapter in the energy sector in the coming years, as Thar is promoted as a centre of coal energy generation.

Under the two signed agreements, a 1320 MW coal fired power plant will be built in Hub, Balochistan, and a 330 MW plant in Thar, Sindh. Construction work on 1320 MW power plant in Hub has already begun, and both projects will be completed in 2019.

Last November, the government let it be known that it would no longer categorize as actively supported projects under the CPEC, two imported coal projects that had originally been penciled in for Hub and Thar. The government is concerned about dependence upon imported coal, and the impact on its foreign exchange reserves. The decision was made by the Private Power and Infrastructure Board, which co-ordinates private investment in the power sector. The approval processes for Hub originally got underway in late 2014 on the basis of imported coal.