Pak-China venture to offer 3pc stakes in power project to Balochistan

KARACHI: A joint venture of Pakistani and Chinese companies, developing 1,320-megawatt coal-fired power plants in Hub, has decided to transfer three percent of the project’s stake to the Balochistan’s government, a senior official said.

Hub Power Company (Hubco) and China Power International Holding (CPIH) formed the joint venture, China Power Hub Generation Company (Pvt.) Ltd, to develop the $2.2 billion coal power project. 

“After the completion of this scheme, Hubco will have 47.5 percent, CPIH 49.5 percent and government of Balochistan will have three percent in China Power Hub Generation Company,” Khalid Mansoor, chief executive officer of Hubco told The News in an interview.

Initially, CPIH held 51 percent and Hubco 49 percent stake in China Power Hub Generation Company. Later, Hubco reduced its shareholding to 26 percent.

Now, Hubco is again increasing its stake in the joint venture to 47.5 percent and both Hubco and CPIH will equally bear the three percent stake transfer to the provincial government.

“The 1320MW coal-fired power plant, after having some hiccups, is now back on track and would achieve the financial close by June 2017,” Mansoor said. “The expected commercial operation date is August 2019.”

The project will have a ground-breaking ceremony within a few days. The engineering, procurement and construction contractors for power plant and integrated jetty have been mobilised and they begun work in August.  The two power plants with 660MW production capacity each as well as a coal-handling jetty are the country’s biggest coal-based power project and the only one in province being constructed under the China-Pakistan Economic Corridor. 

The coal power project will utilise state-of-the-art supercritical technology to generate low-cost electricity with maximum efficiency.  Pakistan is blessed with the seventh largest coal reserves in the world, much larger than the combined oil reserves of Saudi Arabia and Iran, in terms of energy equivalent molecule.

On 330MW coal-fired plant being set up in Thar, Mansoor said the project would achieve financial close in September 2017 and start commercial production by late 2019. “The company has dedicated one percent of its total profit for the development of the local communities of Thar,” Mansoor added.

He said the company also held 75 percent controlling interest in Laraib Energy Limited, which owned and operated a run-of-the-river hydropower plant downstream of Mangla dam, Azad Jammu and Kashmir. Several other alternate energy projects from the platform of Laraib Energy Limited are in the pipeline and would come up once the current coal power projects reach the commissioning, he added. Talking about the circular debt, Mansoor said the amount has swelled due to decline in the capacity of hydropower plants and the reduction in government subsidy.

“The gap will take time to be bridged mainly due to governance, theft and line-loss issues,” he added. “Currently, Hubco’s receivables hover around Rs73 billion.” Explaining the environmental impact of coal power generation, Hubco’s chief said the supercritical technology, being deployed by the company, entails a minimum impact on the environment and it is in compliance with the World Bank’s standards of gaseous emission and liquid effluent.