APD | Another power project under CPEC achieves financial close in Pakistan

By APD writer Muhammad Sohail

ISLAMABAD, Jan. 31 (APD) Another power project under the China-Pakistan Economic Corridor (CPEC) has achieved its financial close of the total cost of 497 million U.S. dollars, local media reported Friday morning.

According to the reports, the 330 megawatt coal-based power project in Pakistan’s southern region of Thar is being jointly sponsored by Hub Power Company Ltd (Hubco), Fauji Fertiliser Ltd (FFL) and China Machinery and Engineering Corporation (CMEC) under the China-Pakistan Economic Corridor (CPEC) framework.

The China Development Bank (CDB) and Habib Bank Ltd (HBL) of Pakistan are the lead lenders. The CDB is the lead arranger of foreign financing from China while HBL is the lead arrangement for local financing.

The financial closing documents for the mine-mouth lignite coal power project at Thar Block-II were signed by Managing Director of Private Power Infrastructure Board (PPIB) Shah Jahan Mirza and Thar Energy Ltd (TEL) chief executive Saleemullah Memon.

Earlier, two projects of 330MW each under the CPEC had achieved the financial close and started power generation. The Implementation Agreement (IA) of the project was signed on Nov 10, 2017.

The project will utilize Thar coal supplied by Sindh Engro Coal Mining Company (SECMC) from its second phase local mine and after implementation of this project, overall coal price (SECMC) would be reduced from 64 U.S. dollars per tonne to 44 U.S. dollars per tonne, which shall significantly reduce the power tariff, the reports said.

The government announced that the sponsors of the project are very keen to complete the project by March 2021 as they had already started construction activities ahead of financial closing.

The project will use state-of-the-art coal technology to comply with all international as well as local environmental standards.

The project is likely to contribute to socio-economic uplift of downtrodden Tharparkar region that is emerging as the energy capital of Pakistan. Several power projects under CPEC have been providing power supply after their completion in record short time and playing major role in the country’s efforts against the power shortage.

(ASIA PACIFIC DAILY)