Lucky achieves financial close for $1 billion coal power project

ISLAMABAD: Lucky Electric Power Company has achieved financial close for its Thar coal-based 660 megawatt Lucky Electric Coal Power Project on Monday.

PPIB Managing Director Shah Jahan Mirza and Lucky Electric Coal Power Project CEO IH Haqqi signed the documents with Minister for Energy, Power division Barrister Syed Ali Zafar as witness.

The project, located at Port Qasim, would be constructed with an investment of $1.081 billion. Seawater would be used for cooling the plant equipped with super critical technology.

The coal-based power project was being financed through debt equity ratio of 75 to 25 percent, and its sponsor would be Lucky Cement Limited. The lenders for the project would be a consortium of Habib Bank Limited, United Bank Limited, National Bank of Pakistan, Bank Alfalah Limited, Askari Bank Limited, Soneri Bank Limited, Bank of Punjab, Meezan Bank Limited, Faysal Bank Limited and Dubai Islamic Bank Limited.

Upon financial closing, PPIB would also issue sovereign guarantee on behalf of the government of Pakistan in favour of the company to secure the payment obligations of the power purchaser. The achievement of financial closing would facilitate the project sponsors in initiating construction activities at site. Construction would be concluded by March 2021, and project would start generating electricity thereafter.

The Sindh Engro Coal Mining Company (SECMC) which is the lease holder for execution of mining operations for coal extraction in the Thar coalfield, Block II will supply coal to the project, while the electric power generated from the project will be sold to Central Power Purchasing Agency (guarantee) Limited (CPPAGL) under a 30-year Power Purchase Agreement.

Minister for Energy, Power division Barrister Syed Ali Zafar said that to make the country more robust and reliable, and reduce dependence on imported fuels, projects based on indigenous Thar coal assumed further importance from energy security as well as economic perspective. He advised PPIB to further exploit the Thar coal potential for power generation.

He also appreciated PPIB’s efforts of successfully inducting 37 power projects totalling 15,500MW capacity with an investment portfolio of around $17 billion, which were providing reliable electricity to the national grid.

PPIB with its proven track record has achieved yet another major milestone with the financial closing of another Thar coal-based IPP after 660MW Engro Powergen.