PPIB nods to 700MW coal-fired power plant in Thar

KARACHI: Private Power and Infrastructure Board (PPIB) has given a go-ahead to the UK-based Oracle Power for the development of a 700MW coal-fired power plant in Thar Block-VI, a statement said on Monday.

“It was an important step in the regulatory process in Pakistan, confirming the reciprocal commitments of Oracle and its consortium partners and the government of Pakistan to this major energy project,” Shahrukh Khan, CEO Oracle Power said commenting on the development.

“Together with the inclusion of the project in China-Pakistan Economic Corridor (CPEC), it should assist fast-tracking of the project to financial close.” The company in statement said the PPIB had approved issuance of a ‘notice to proceed’ (NtP) and ‘letter of intent’ (LoI) to its subsidiary Thar Electricity (Private) Ltd (TEPL) for the development of the power plant as part of the development of 1,400MW facility’s first phase.

“Originally, the power plant’s first phase was planned to have a capacity of 660MW; however, the increase in capacity was allowed in line with new requirements in the country for more efficient technology,” the Oracle Power handout added.

The Oracle Power and its consortium partners, Sichuan Provincial Investment Group (SCIG) and PowerChina International Group, had submitted a proposal for the power plant in November last year. The statement said the issuance of the LOI was a major step required of Oracle in the first stage of the memorandum of understanding (MoU) signed with SCIG and PowerChina, as announced on November 21, 2017.

The company said the SCIG and PowerChina are currently undertaking their legal and financial due diligence as their part of the first stage of the MoU. “This will then lead into the second stage (expected in the second quarter 2018) in which both the companies will make their final development decision, and the EPC contracts and definitive agreements will be entered into with the Chinese partners commence investing in the project,” it said.

Moreover, the statement said as part of the next steps, the company was waiting for a formal issue of the LoI and the NtP, with it then needing to achieve a performance guarantee for an amount of $700,000.

“The consortium will subsequently be required to submit applications related to the tariff and a generation license before agreeing to a 30-year power purchase agreement, as well as contracts for coal supply and implementation with the government of Pakistan,” the Oracle Power statement said.