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November 23, 2019

New Jamshoro power plant reaches $303mln financial close

Business

November 23, 2019

ISLAMABAD: The financial close amounting $303 million has been achieved for Jamshoro Power Project (Lot-II) after two days of extensive consultations during a joint coordination conference of development partners arranged by Economic Affairs Division, a statement said on Friday.

Being the development partners, Islamic Development Bank will contribute $100 million, Saudi Fund for Development $91 million, Kuwait Fund for International Development $40 million, while OPEC Fund for International Development will chip in $72 million for the project that involves construction of Lot-II of 2x600 MW (net) Jamshoro Coal Power Plant.

The statement said, during the conference, the government also signed the first financing agreement worth $100 million with Islamic Development Bank in a ceremony with Muhammad Hammed Azhar, Minister for Economic Affairs, in attendance.

The loan agreement was signed by Noor Ahmed, Secretary Economic Affairs Division, while Musa Sillah, Director (MENA & Europe) was the signatory from Islamic Development Bank.

Construction of Lot-I of the plant is already underway, whereas Lot-II, which is a new 600 MW (net) supercritical power plant, would be built down the line.

The statement added that the project would help decrease the power shortfall currently existing in the country and it was an essential part of the government strategy to fill existing supply gap, while at the same time increase the ratio of cheap coal-based power in the overall mix of electricity supply.

Upon completion, the project would add on an annual basis 4,488 GWh to the national grid to support and sustain economic growth of the country.

It may be recalled that in the month of September 2019, an agreement was also signed with IsDB for support to the Polio Eradication Program worth $100 million, including $10 million grant under Lives & Livelihood Fund of the Bank.

Last year, Jamshoro Power Company and Siemens-HEI had signed an agreement to develop Pakistan’s first supercritical coal-fired power plant in Jamshoro.

Following the signing of engineering, procurement and construction (EPC) contract for the first unit having a capacity of 660MW, the contract price for Lot-I was figured at $562 million. The Lot-I, the construction of which is still going on, is being funded by Asian Development Bank.

On the other hand, then the EPC contract price of Lot-II (unit 2 of 660MW and expansion of balance of plant) was estimated at $313 million.

According to officials, the project would use 80 percent imported sub-bituminous coal and 20 perecnt local Thar lignite, leading to the generation of economical energy to meet the future electricity needs of the country.

It must be noted that work on 13 energy projects having capacity to generate 8,995MW electricity under China Pakistan Economic Corridor (CPEC), throughout the country is in full swing.