ASIAN DEVELOPMENT BANK OK’S LOAN FOR PAKISTAN COAL PLANT

Karen Frantz
GHG Monitor
12/13/13

The Asian Development Bank approved a $900 million loan for a new supercritical coal power unit in Jamshoro, Pakistan despite a “no” vote from the United States due to its new policy of not supporting public financing for coal plants that are not equipped with carbon capture and storage technology. “The United States recognizes that Pakistan’s severe power shortages cripple economic growth and undermine the country’s ability to generate employment and reduce poverty,” the Treasury Department said in a position statement on the decision. But it said that “the United States has serious reservations about supporting public financing for coal plants due to the significant, grave and lasting negative impacts that coal emissions have on the environment and on health.”

The Treasury Department said in November that it would no longer provide aid through international development banks for new overseas coal-fired projects unless those projects deploy CCS or if they use “the most efficient coal technology available in the world’s poorest countries in cases where no other economically feasible alternative exists.” In its recent position statement on the Jamshoro unit, the Treasury Department said that the project does not meet these criteria. “In particular, the United States notes that the project does not include credible offsetting activities for the more than 8 million tons of carbon emissions per year,” it said. “In addition, the project does not deploy CCS or deploy best available technology. Therefore, we wish to be on record as voting ‘no.’ Our vote is the result of our global policy on climate change, not a Pakistan-specific objection.” The department also urged the Asian Development Bank to expand its work with Pakistan on clean energy generation capacity.

But the ADB lauded its move to provide Pakistan the loan. “Acute power shortages of up to 20 hours a day have crippled economic growth and are contributing to unemployment and social unrest across the country,” said Director General of ADB’s Central and West Asia Department Klaus Gerhaeusser. “There is an urgent need for more affordable and dependable sources of power and this unit will generate an additional 600 megawatts of electricity for the national energy mix. The ADB also noted that the plant will use “state of the art emission control equipment,” and that Pakistan’s carbon dioxide emissions are 19 percent of the global average per person and the country only has one coal-fired power plant in operation. The unit will be the first in Pakistan to use supercritical boiler technology and will be built at the existing power plant.