Thar-Port Qasim railway to be completed by December 2025

Islamabad is looking to upgrade its energy infrastructure by connecting Port Qasim to Thar’s coal mines via railway by the end of 2025. As per news reports, government authorities are expanding transportation infrastructure to aid the development of Pakistan’s weak energy sector.

Reports revealed that authorities have authorized the construction of a 1000 Mega Watt (MW) battery storage facility to support the national grid. This facility, which will utilize wind energy, is expected to cost the national exchequer upwards of half a billion dollars.

Pakistan, cash strapped as usual, is engaging with international creditors to discuss potential avenues of funding. If funds for the project are secured, it would spell great news for the country’s economy.

Islamabad has reportedly discussed the aforementioned battery project with large global lenders including the Asian Development Bank (ADB), Islamic Development Bank and, the World Bank (WB). Pakistan recently received a $20 billion loan package from the WB indicating the creditors willingness to work with the country.

The terms of the WB loan are fairly advantageous to Pakistan as well. A staggering 14 billion dollars of the amount will be in the form of concessional loans. This means that the economy can significantly benefit from the lax terms of the loan if authorities can leverage the loan amount to build sustainable solutions to the issues that are currently plaguing the economy.

If the initiative receives funding, the national grid could witness noticeable improvements. Furthermore, it could also maximize the utilization of renewable energy, potentially allowing solar panel owners to not face higher tariff rates.

It might be worthwhile to consider utilizing the Special Investment Facilitation Council (SIFC) to rake in investments from bilateral and independent sources. However, given the country’s subpar experience with Independent Power Producers, lawmakers from Islamabad might not want to explore this avenue fully.

According to reports, Secretary Power Division Fakhar Alam Irfan informed a parliamentary panel regarding developments surrounding the new railway extension project. On ground teams have begun operations already and the project is projected to reach completion around December.

Project details reveal that the rail network will span 105 kilometers and could effectively reduce Pakistan’s reliance on imported fuels. Historically, cash-strapped Pakistan has been a net importer of fuel. Data from recent years revealed that the country’s largest coal based imports were coal briquettes ($647 million) and Coal Tar Oil ($47 million).

Coal production might witness a boost if infrastructure linked to its extraction and transportation gets upgraded. If domestic coal mines extract enough coal to become self-sufficient, the trade deficit would narrow, significantly allowing Pakistan’s trade balance to improve.