Shanghai Electric closes financing for Thar coal plant

ISLAMABAD: China's Shanghai Electric Corporation has secured financial closure for Pakistan's largest coal-fired power plant, a key project under the China-Pakistan Economic Corridor (CPEC), the Private Power and Infrastructure Board (PPIB) said on Wednesday.

The 1,320 megawatt (MW) plant, located in the Thar desert in the Sindh, will use super critical technology to produce electricity at the lowest tariff of Rs4.98 per unit.

The financial closure was signed at a ceremony in Islamabad, attended by PPIB Managing Director Shah Jahan Mirza, Meng Donghai, Chief Executive of the Thar Coal Block-1 Power Generation Company, Zhou Bo, Chief Executive Officer of Industrial and Commercial Bank of China (ICBC), Karachi Branch, and senior officials of PPIB and the project company/sponsors, the PPIB said in a statement.

The project, which started construction amid the Covid-19 pandemic by using its own equity and bridging financing, was completed on Feb. 5, 2023, meeting the tight deadlines agreed by the governments of Pakistan and China.

Shanghai Electric Group Corporation is the project sponsor, while Sino Sindh Resources Limited (SSRL) is the coal supplier from Thar Block-1. ICBC, China Development Bank, Bank of Communications Co. Ltd., China Minsheng Bank Corporation, Postal Savings Bank of China Co., Ltd., and Agriculture Bank of China are the lenders of the project, while Sinosure is the insurer.

The plant is equipped with the latest equipment to comply with the environmental standards of the World Bank/IFC and Pakistan EPA.

The project is the second cheapest power project in terms of fuel cost, saving Pakistan around $500 million in foreign exchange annually, the statement said.

The project is expected to generate nine billion units of electricity per year, reducing the overall basket price of electricity by around Rs200 billion annually, it added.