THAR COAL

1. 1

2. 2 Pakistan Energy Scenario Pakistan energy requirements potentially huge: Sixth largest country in the world, with its growing population to exceed 190m by 2015. Rising population, incomes, per capita energy use, and industrialization translate to high energy demand growth (total primary energy supply expected to triple or quadruple by 2025). Serious economic and development implications, as energy deficit Pakistan faces increasing energy import cost, with few medium term solutions to supply shortfalls

3. 3 Alarm Bell

4. 4 Pakistan Current Power Generation Mix

5. 5 National Costs of Load Shedding Cost to the Industrial Sector Rs 157 billion Cost to the other sectors of industrial loss of Value Added Rs 53 billion Total cost of industrial load shedding to the economy Rs 219 billion Cost as percentage of GDP 2 % Loss of employment in the economy 400,000 Loss of exports Rs 75 billion (equivalent to US $ 1 billion)

6. 6 ECONOMIC IMPACT DUE TO ENERGY DEFICIT For firms with self generation Additional cost of Power self Generation Rs 32 billion Value Added Loss Rs 42 billion Total Cost Rs 74 billion For firms without self generation Additional cost of Power self Generation Rs 6 billion Value Added Loss Rs 77 billion Total Cost Rs 83 billion Overall Cost to the Industrial Sector Rs 157 billion Cost as % of Industrial value added 9% Percentage loss of Production 7% Loss of industrial Employment 300,000 workers Source: IPP estimates listed in Beacon House National University publication: State of the Economy � Emerging from Crisis 2008

7. 7 Options Continue Importing Furnace Oil leading to increasing import bill. Improve and identify Alternate/Renewable Energy Develop Hydel Projects Minimize T&D Losses and take efficiency improvement measures. Exploit indigenous resources, such as Thar Coal which has a generation potential of 100,000 MW consuming 536 million tonnes/year (Enough resources for more than three centuries). Total reserve is equivalent to 50 billion tone of oil (more than Iran and Saudi Arabia combined oil reserves) or over 2000 TCF of Gas (42 times greater than total gas reserves discovered in Pakistan so far)

8. 8 Pakistan�s Coal Reserves Sindh 185,457 million tonnes Punjab 235 million tonnes Balochistan 217 million tonnes NWFP 90 million tonnes Azad Kashmir 9 million tonnes

9. 9

10. 10 Comparison Of Coal Quality

11. 11

12. 12

13. 13

14. 14 Why Thar Coal? Current dependable power supply hovers around 14000 MW in summer whereas it drops down in winter. On the other hand power demand in year 2030 would reach more than 100,000 MW In view of the power generation and energy demand, Thar�s rich coal reserves not only promise energy independence for Pakistan but also offer lots of opportunities for prospective investors

15. 15 Annual Savings in Foreign Exchange from Thar Block II Cumulative savings of over USD 87 Billion from Block II alone due to PKR devaluation and oil price increase. (fuel replacement savings)

16. 16 Benefit to Economy � Reduction in Power Generation Cost Net Present Value of Savings is Rs. 3.2 Trillion from Block II alone

17. 17 KEY REQUIREMENTS FOR DEVELOPMENT OF THAR COAL To make available robust infrastructure. Developing the coal sector policy and regulatory framework. Setting up operational environmental and social management framework for coal to power sector Updating/developing key technical, financial, market and local impact analysis and other information relevant to the investor Preparation of Policy documents for conducting ICB for Thar blocks.

18. 18 Challenges for all Blocks Challenges Infrastructure must be completed Water supply Short Term Roads Short Term Railways Mid term Transmission lines Mid term Power line for waste mining and pumping required Human Resource development

19. 19