ADB to Lend $900 Million for Coal Plant Unit in Pakistan

The Asian Development Bank will lend $900 million to build a 600 megawatt coal-fired power generation unit in Pakistan as part of efforts to provide cheap and reliable power.

The unit will be built at an existing power plant in the town of Jamshoro in Sindh province, about 150 kilometers (93 miles) east of Karachi, the multilateral lender said in a statement today.

“Acute power shortages of up to 20 hours a day have crippled economic growth,” Klaus Gerhaeusser, director general at ADB’s Central and West Asia department, said in the statement. “There is an urgent need for more affordable and dependable sources of power.”

The project raised concerns in developed nations such as the U.S., Britain and Germany about taxpayer money going to finance power plants that burn the most polluting fuel, according to the Natural Resources Defense Council. Those three nations hold 18.5 percent of the bank’s voting power, according to the latest annual report.

“It is unfortunate that scarce public funding is being used to support more carbon pollution instead of clean energy,” said Jake Schmidt, international policy director for the New York-based environmental policy researcher. “Hopefully this is the last coal-fired power plant the Asian Development Bank funds as clearly this generated a lot of controversy.”

An official at the ADB declined to say which countries voted in favor of the loan in today’s decision. The development bank said the new unit will help Pakistan cut electricity tariffs.

“Coal-fired power plants, using cleaner technology, provide an environmentally sound and cost-effective, medium-term energy solution at a time when the country’s natural gas reserves are dwindling,” the bank said.

The new unit is expected to be completed by December 2018, according to the ADB statement.

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