Power gamble in Gwadar: New coal plant exposes Pak's energy dead end

For anyone who has followed Pakistan's power sector over the past 20 years, the latest push for new projects feels painfully familiar.

- ASHISH SINGH

Once again, policymakers are reaching for more generation capacity when the real crisis lies elsewhere. The plan to move ahead with the Azad Patan and Kohala hydropower projects and the Gwadar coal-fired plant, adding about 2,100 MW, comes at a time when Pakistan already has surplus electricity on paper.

It reflects a pattern—build more plants, avoid hard reforms.

Pakistan's problem today is not lack of megawatts. It is the way those megawatts are managed, moved and paid for. Over the last decade, large projects—many under CPEC—have increased installed capacity. Yet consumers still face high tariffs, outages and unreliable service. This gap between "capacity on file" and "power in the home" is the heart of the crisis. It is caused by a mix of circular debt, weak transmission, power theft and poor governance. New plants do not fix any of these.

Circular debt is the most visible symptom. The power sector owes trillions of rupees. A key driver is capacity payments to independent power producers. Under these contracts, the state must pay even if the plants do not run at full load. Adding more projects under the same model simply raises the fixed bill. When demand is weak or the grid cannot carry the power, these plants sit underused but still earn their guaranteed payments. The cost is pushed onto the budget and, finally, onto the consumer's bill.