Guddu Power Plant is set to regain a significant chunk of its lost generation capacity, after the government invited international competitive bids to rehabilitate the fire-damaged Steam Turbine 16 at the 747 MW facility. The project is expected to restore 297 MW of generation capacity and cut the plant’s per-unit generation cost by Rs. 4.19.
According to the Power Division, the rehabilitation is expected to bring the plant’s generation cost down from Rs. 13.87 per unit to Rs. 9.68 per unit. The procurement process covers ST 16 and its allied equipment, and has been structured as an EPC turnkey project, meaning a single contractor will handle engineering, procurement and construction under one contract.
Why Guddu Power Plant Needs This Rehabilitation
The steam turbine and its associated generator have remained out of service since a fire incident in July 2022. As a result, the plant has been operating in open cycle mode at around 450 MW, well below its designed capacity of 747 MW. Because of its relatively high generation cost in this reduced mode, Guddu currently ranks around 11th in the national dispatch merit order.
Following technical studies, integrity assessments and an engineering review, the Power Division has now initiated the international competitive bidding process for the rehabilitation work. The deadline for bid submissions has been set for October 7, 2026, while the rehabilitation works themselves are targeted for commissioning by December 2028.
Expected Impact on Pakistan’s Power System
Once ST 16 is restored, the plant is expected to return to full combined cycle operation and reach its designed output of 747 MW, an increase of about 66 percent over its current output. Guddu’s position in the dispatch merit order could also improve to approximately seventh, allowing the system operator to displace more expensive sources of electricity with this comparatively cheaper generation.
The Power Division said the additional lower-cost generation would allow the government to make greater use of an existing power asset rather than relying solely on new generation capacity, an approach that could help ease pressure on the overall cost of electricity supplied to consumers. The project is also considered important for the national transmission system, since Guddu sits at a key point in the north-south power flow corridor connecting different regions of the grid.
Analysts tracking Pakistan’s power sector say rehabilitation projects like this one are often more cost-effective than building new plants from scratch, since they make use of existing infrastructure, land and grid connections. With the bidding process now underway, attention will turn to which contractors qualify and how quickly the EPC turnkey project can move from award to construction, given the multi-year commissioning timeline already set for December 2028. Energy officials note that Pakistan’s generation fleet includes several similar plants where fire, flood or technical faults have taken units offline for extended periods, and Guddu’s rehabilitation could serve as a template for evaluating whether other idle capacity is worth restoring rather than replacing.
For consumers, the practical effect of a cheaper, higher-output Guddu plant would show up gradually in the broader generation mix, as more expensive fuel sources are pushed further down the dispatch order. Officials have not detailed the financing structure for the EPC contract, though similar turnkey projects in Pakistan’s power sector have typically combined public funding with financing arranged by the winning contractor. Whichever combination is used, the size and multi-year duration of the contract mean the outcome will be closely watched by both energy planners and the contractors bidding for the work. A successful rehabilitation would mark one of the larger capacity restorations completed at a single thermal plant in recent years.
