by Moiz Farooq

Since its inception in 2013, CPEC has made groundbreaking progress in Pakistan’s energy sector. Chinese companies have introduced over 8,700 megawatts of power capacity, helping to alleviate severe energy shortages that once constrained Pakistan’s economic potential. These contributions span an extensive range of energy sources, from coal and nuclear to hydropower, solar, and wind. Altogether, there are now 46 power projects across Pakistan funded through Chinese investments, including landmark installations such as the Sahiwal Supercritical Coal-Fired Power Plant, Port Qasim Power Plant, Suki Kinari Hydropower Project by China Energy Engineering Group, Karot Hydropower Station Project by China Three Gorges South Asia Company Limited, Neelum–Jhelum Hydropower Project by China Energy Engineering Group, Three Gorges Pakistan Wind Farm Power Project and others. These projects, equipped with world-class technologies and managed with meticulous precision, provide 8,752 MW to Pakistan’s total power capacity, a substantial 19% of the national total.

The efficiency with which Chinese companies have executed these projects has been remarkable. Aided by advanced engineering and management practices, these initiatives have not only met project timelines but have often exceeded performance expectations. The Matiari-Lahore ±660kV High-Voltage Direct Current (HVDC) transmission line, spearheaded by the State Grid Corporation of China, serves as a prime example. This state-of-the-art project has vastly improved Pakistan’s power transmission efficiency, reducing losses, enhancing grid stability, and ensuring an uninterrupted flow of electricity across vast distances. As of September 2024, cumulative Chinese investments in Pakistan’s energy sector have reached an impressive $13.279 billion, with another $6.964 billion planned for the coming years, underscoring China’s long-term commitment to Pakistan’s energy stability and development.

A key advantage of Chinese-led power projects has been their ability to bring down electricity costs for Pakistan. The National Transmission and Dispatch Company (NTDC) reports that the average generation cost of electricity from CPEC projects is 8.80 PKR/kWh, far lower than the national average of 19.66 PKR/kWh. This competitive cost structure is a result of efficient technologies and the use of diversified energy sources, including renewable options like hydropower, wind, and solar. The result is a cost-effective, reliable power supply that has reduced Pakistan’s dependency on costly oil and gas imports, thereby stabilizing the national grid. In addition, the operational consistency of these projects has played a pivotal role in alleviating the country’s circular debt problem, which has been a major fiscal challenge for Pakistan’s energy sector.

The economic and social impact of CPEC’s energy projects extends beyond power generation. The construction and operation of these projects have created a significant number of jobs for the local population, boosting both livelihoods and technical expertise. Since 2013, over 182,000 Pakistani workers have been employed in CPEC power projects, with around 35,900 jobs currently maintained in the operational phase. Furthermore, these projects have also facilitated skills development on a large scale, training over 46,100 Pakistani professionals, including 38,700 technical experts. Through knowledge transfer initiatives, Chinese companies have ensured that Pakistani personnel are well-equipped with hands-on experience in advanced energy technologies and management techniques, enhancing the capabilities of Pakistan’s workforce and creating a pool of skilled professionals for future development projects.

Chinese companies have also taken on an active role in Corporate Social Responsibility (CSR), contributing significantly to local communities’ social and economic welfare. From establishing the “China-Pakistan Friendship School” in Muzaffarabad to offering free Chinese language classes through the Shanghai Electric Thar Coal Project, Chinese companies have demonstrated a holistic approach to development. Through these initiatives, they have built strong community relations and reinforced the people-to-people ties that underpin the China-Pakistan partnership. Furthermore, these CSR activities have brought about tangible improvements in education, healthcare, and infrastructure, helping elevate the quality of life in communities around these projects.

With CPEC moving into its second phase, the focus has now shifted to promoting green and sustainable energy solutions in Pakistan. By 2030, Pakistan plans to transition 61% of its power generation capacity to renewable sources, aligning with global environmental standards and paving the way for a cleaner future. China’s commitment to green energy is evident in its support for Pakistan’s renewable energy goals, and CPEC projects are playing a crucial role in this transition. Through the use of technologies like supercritical and clean coal, as well as advancements in hydropower, solar, and wind energy, Chinese companies are actively helping Pakistan lower its carbon footprint while meeting its energy needs sustainably.

While Pakistan’s power sector has made tremendous strides, several challenges remain, including transmission losses, power theft, and a mounting circular debt burden. Chinese projects under CPEC have introduced valuable solutions, such as advanced grid management systems and high-efficiency power plants, which have made a significant impact on these persistent issues. However, addressing these challenges fully will require a coordinated national effort, involving reforms in policy and governance, better regulation, and continuous upgrades to infrastructure. The Chinese-led initiatives under CPEC have set a benchmark in operational efficiency and resource management, providing a model for Pakistan to emulate across its energy sector. By building upon these foundations and implementing comprehensive reforms, Pakistan can establish a more robust and resilient power sector that can support long-term economic growth and social stability. 

Writer is Executive Editor at Pakistan Economic Net and Daily Ittehad Media group, mainly writes on CPEC, Sino-Pak relations, foreign policy, climate and economy.

Email: Moizfarooq01@gmail.com