ISLAMABAD: A Chinese power generation company and the government of Pakistan on Friday signed a letter of interest to set up 1,320-megawatt coal-based power project in Thar Desert.
Managing Director Private Power and Infrastructure Board (PPIB) Shah Jahan Mirzaand and Director Shanghai Electric Group Company Ltd (SEGCL) signed the letter of interest (LoI) for the development of two indigenous coal-based power plants of 660MW each.
The power plants are to be set up under the China-Pakistan Economic Corridor project. Their commercial production will start in 2018 and reduce the country’s dependence on costly oil-based power generation and save millions of dollars in import bills.
The company will use steam turbine technology and sell power to the National Transmission and Despatch Company under a 30-year term power purchase agreement.
Federal Minister for Water and Power Khawaja Muhammad Asif, Secretary Water and Power Younus Dagha and other senior officials witnessed the signing ceremony.
Minister Asif said the government is committed to develop Pakistan’s local coal resources and utilise them for power generation, thus realising the dream of making Thar the energy capital of Pakistan in coming years.
The Chinese company will develop the project by utilising indigenous Thar lignite coal to be supplied by Sino-Sindh Resources, which is the lease holder of Thar Block-I.
The sponsors of the project have already signed equity investment agreement with China Coal Technology and Engineering Group Corp and joint venture agreement with SEGCL during the Chinese president visit to Pakistan a few months back.
Pakistan was emerged as the seventh biggest country among top 20 countries of the world when the Geological Survey of Pakistan discovered huge lignite coal resources in Thar desert of Sindh province in 1990’s. The area spreads over more than 9,000 square kilometers and comprises around 175 billion tons of coal, sufficient to
meet the country’s fuel requirements for centuries.