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July 28, 2017

Thar coal-fired power project to go online by June 2019

Business

 
July 28, 2017

KARACHI: The first of Thar coal-fired power projects is likely to begin commercial operations by June 2019, about four months ahead of its official deadline, officials said on Thursday.

“The financial close of the project was achieved on April 4, 2016 and since then 14.2 percent of the total work has been completed,” Muhammad Idrees, Manager Planning and Contracts, Sindh Engro Coal Mining Company (SECMC), told a group of journalists invited to visit the project site.

“This is the first coal-fired power project in Thar, and it is one of the leading energy projects of China Pakistan Economic Corridor (CPEC).”

Idrees added it was also the only energy project with a majority private sector sponsorship. “Under the second phase, two more power plants (330MW each) will be completed by December 2019, as the SECMC has committed to offtake coal for phase II (7.6 million ton per acre) to Thal Limited and Hubco for setting up plants in Block II,” said he.

The SECMC, he said, was also planned to add additional capacity of 11.4 million tonne per acre coal beyond phase II by December 2021.

“Five more coal-fired power plants will be built in the Block II by December 2021, expanding the total production capacity of Thar coal-based electricity to around 3,000 MW,” the SECMC official said.

He said the cost of coalmining project was $845 million, which would be on based on 75:25 debt to equity ratio and consist of 31.5 percent foreign, and 68.5 per cent local debt. “Following the completion of power plants, the consumers would be able to have access to the cheap electricity as Engro's generation would be linked to the national grid at the rate of Rs6 to Rs7 per unit,” he said.

It must be noted the main sponsors of the project were Sindh government with 54.7 percent share, Engro and Thal Limited with 12 percent each, and Habib Bank Limited (HBL) with 10 percent share.  Speaking on the occasion, Mohsin Babbar, Manager Media and Communications SECMC, said work on the power plant and coalmining was going on simultaneously.  “The total cost of two 330 MW mine-mouth power plants would be $1.1 billion with a debt to equity ratio of 75:25, and it would consist of 75 percent foreign and 25 percent local debt,” Babbar said.

The main sponsor of the project, he added, was Engro, having a share of 50.1 percent, while other shareholders included Liberty, HBL, and China Machinery Engineering Company (CMEC).

“The Sindh government had been a key enabler for the Thar project, which committed 110 million equity investments for phase I and provided a backup sovereign guarantee to the federal government of $700 million,” said Babbar.

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