Chinese banks’ consortium backs financing for power project in Pakistan

By APD Writer Muhammad Sohail

ISLAMABAD, Oct. 26 (APD) -- A consortium of Chinese banks, led by China Development Bank (CDB), has approved financing of 1.5 billion U.S. dollars for a power project in Pakistan, an official said on Thursday.

Khalid Mansoor, Chief Executive Officer of the project, said that the financing approved for Hub Power Company Limited’s (Hubco), a 1,320-megawatt imported-coal fired power project to be built in Hub area of Pakistan’s southwest Balochistan province of Pakistan.

The total cost of the project is estimated at 2 billion U.S. dollars which include a 75 percent debt and 25 percent equity component.

It is part of the multi-billion U.S. dollar project of China-Pakistan Economic Corridor (CPEC), a flagship project of China’s One Belt and One Road Initiative.

“The 2x660MW Project financing documents were signed amongst Hubco, China Power International Holding Ltd (CPIH) and CDB-led consortium of Chinese lenders in located Chengdu”, China, said Khalid Mansoor.

The project is being set up by China Power Hub Generation Company (CPHGC), which is a joint venture of the HUBCO and CPIH.

Hubco has a 47.5 percent stake in the joint venture, while the rest lies with CPIH.

Shamsul Islam, Hubco Company Secretary, said that construction of the project on the site started in August 2016 and so far 300 million U.S. dollars have been spent on the construction.

He said the project is set to receive the approved financing of 1.5 billion U.S. dollars sometime in December 2017.

Earlier, the company announced that the first of the projects would start commercial production by December 2018 and the second one would be online by August 2019.

The project will contribute nine billion kWh of cheaper electricity annually to the national grid, and it will support four million Pakistani households.

The 1,320megawatt Sahiwal Coal-Fired Power Project, the first mega project of China-Pakistan Economic Corridor, has already been completed in June this year in a record short time in Pakistan’s eastern province of Punjab.

(ASIA PACIFIC DAILY)