Hubco plans to set up 330MW coal-fired plant

KARACHI: Thar Energy Limited (TEL), a wholly-owned subsidiary of Hub Power Company (Hubco), applied for a licence with the National Electric Power Regulatory Authority to set up a 330-megawatt local coal-based power generation facility in Thar Desert, a document said on Wednesday.

The project cost is estimated at $498 million, based on the debt and equity of 75 and 25 percent. The proposed plant will be set up in Thar Block-II.

Hubco, a leading power producer, is already developing 1,320MW power plants based on imported coal. A joint venture, namely China Power Hub Generation, of China Power International Holding and Hubco has been formed. The work to develop two 660MW plants with its associated coal unloading jetty has been started with an expected completion in 2020.

Through TEL, Hubco is planning to build another 330MW mine-mouth plant based on indigenous coal to be mined from the coal fields of Thar Block-II. The Sindh Engro Coal Mining Company was awarded the contract of exploration and mining of lignite, primarily for the power generation.

Hubco has also applied for the letter of intent and received a notice to proceed from the Pakistan Power Infrastructure Board. 

TEL plans to develop the project on a fast-track basis in order to achieve expeditious financial close. After the financial close, the notice to proceed will be issued to engineering, procurement and construction contractor on a ‘lump-sum date-certain fixed-price’ basis.

The main sponsor of the project is Hubco. However, there is a possibility of additional shareholders joining Hubco.

Thar Desert of Sindh possesses the country’s biggest coal reserves of 185 billion tons. In 1991, the Geological Survey of Pakistan and the United States Agency for International Development discovered the reserves. The quality of lignite in Thar is highly suitable for the power generation.

Furthermore, the cost efficiency of electricity generated on coal is relatively high as compared to other sources of fuel. 

Coal continues to be an affordable source of electricity generation. Unlike other fossil fuels used for generating electricity, coal prices have changed a little since the 1980s. In the last 20 years, the coal price increased only four percent, while crude oil prices rose 51 percent and natural gas prices surged 211 percent.