Sindh to set up 104MW gas-run power projects

KARACHI: Sindh government will set up two gas-run power projects with a cumulative generation capacity of 104.20 megawatts at Nooriabad industrial area under the public-private partnership mode, officials said on Wednesday.
The officials said the National Electric Power Regulatory Authority (NEPRA) has already granted licences to two specially established companies, Sindh Nooriabad Power Company (Pvt) Ltd and Sindh Nooriabad Power Company Phase-II (Pvt) Ltd, for generating 52.10MW each.
“These will be the first-ever power projects to be executed by a province under the public-private partnership mode,” an official said.
The official said the government will soon apply for the tariffs to NEPRA. Total cost of the projects will be determined once the tariffs are approved, he added.
He said the provincial government has initiated gas supply agreement with the Sui Southern Gas Company for supplying of 10 million metric cubic feet/day of gas to each power project for 25 years.
K-Electric Limited will be the power purchaser of the upcoming projects as Hyderabad Electric Supply Company (HESCO) has expressed reluctance to purchase power from the Sindh government.
National Transmission and Despatch Company (NTDC) has also expressed its lack of interest in wheeling electricity from Sindh Nooribad power projects.
The official said the authority directed HESCO not to decline buying the electric power offered from any prospective investor without a legal reason.
He added that it also asked NTDC to adhere to the terms and conditions of its licence and not to deny any generation company of its rights to use its system for evacuating electricity.
According to an official document, Sindh government agreed to provide around Rs6.0 billion bank guarantees and cash margin of Rs600 million to the NBP for opening of letters of credit for the procurement of machinery and equipment for the power projects.
The officials said Sindh Bank will repay Rs2.805 billion of debts acquired for the projects in case of default by the project operators.
However, they said the provincial government will stop extending financial support once the power projects achieve the financial close.
The power sector is experiencing huge demand and supply gap. The government is making efforts to reduce this gap through exploiting indigenous resources.
The official said since the country’s law permits provinces to set up power generation facilities of any size, at any location and on fuel of their choice the Sindh government has decided to build, own and operate generation facilities at various industrial estates across the province.