China ‘Greens’ Its Economy By Funding Massive Coal Projects In Pakistan

REUTERS/Jianan Yu/File Photo

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Michael Bastasch DCNF Managing Editor
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China is helping Pakistan build up its energy sector, including a $3.5 billion joint venture to extract 1.3 gigawatts worth of coal in the Thar desert.

Pakistan plans to use Thar brown coal to bring electricity to the millions of people living in energy poverty or suffering through daily blackouts. The country could get 24 percent of its electricity from coal by 2020 with the help of China.

It’s one of many coal projects China is backing abroad, while it cuts coal mining and power generation at home to fight pollution. China also promised to “peak” greenhouse gas emissions by 2030 as part of the Paris climate agreement.

China’s energy ministry canceled more than 100 coal-fired power plants that were being planned or being built in January. The country reaffirmed its commitment to its Paris commitments after U.S. President Donald Trump signed an executive order rolling back global warming regulations in late March.

“As a responsible developing country, China’s plan, determination and policy to tackle climate change is resolute,” Chinese foreign ministry spokesman Lu Kang told the Associated Press.

China’s coal use fell nearly 5 percent last year, but the country still gets 62 percent of its electricity from coal-fired power plants.

The country’s cut in domestic coal use comes as they fund coal projects abroad, including the Engro mine in the Thar desert.

Another Chinese joint venture plans to build another coal project near the Engro mine in June. Another block of coal will begin production for electricity generation by 2019, reports the Salt Law Tribune.

China has also backed coal-fired power plants in Southeast Asian countries, including Vietnam. China is involved in financing or building at least 79 coal-fired power projects around the world. The total generating capacity of those projects is 52 gigawatts.

Why the push abroad? It provides Chinese firms and investors with opportunities to make money off coal projects at a time when that’s less politically popular in China. Coal workers also travel to these projects, keeping them from losing their jobs.

The Engro mine, for example, has 350 Chinese workers, and the return on equity for Chinese investors is about 30 percent, according to the Salt Lake Tribune.

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