One of Pakistan’s largest power producers is to spend in the region of $1bn in converting its oil-fired plant to coal in a bid to increase production.

Hub Power plans to increase its generation capacity to 5000 MW by 2020 from about 1600 MW at present and has received bids from six contractors to take on the project.

Hub power plant
Hub, a private sector company, owns the plant in Balochistan, 60 MW from Karachi and its electricity is generated by four 400 MW oil-fired units at present.

Bloomberg reports that Pakistan’s power companies are shifting to cheaper fuels as Prime Minister Nawaz Sharif’s government takes steps to end energy subsidies to comply with loan agreement conditions set by the International Monetary Fund. Dwindling gas supplies are also hastening the switch.

Pakistan generates about 65 per cent of its electricity from oil and gas and 0.1 per cent from coal, according to the Pakistani finance ministry’s 2013 Economic Survey.

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