Sindh achieves $1,301m financial close for 1,320MW power plants in Thar, says CM Murad Ali Shah

Sindh Chief Minister Syed Murad Ali Shah has said that his government has achieved a financial close for installation of a 1,320 WM power plant in Block-I in Thar, and expansion of Block-II of Thar for development of another 660 MW power plant.

“Under this financial close, $1,301 million will be invested in Thar for generation of 1,980 MW electricity and development of two coal mines with production of 10.6 MTPA,” the chief minister said while speaking at ‘Conference on Public Announcement Financial Close of two Mines’ at the CM House on Wednesday.

The conference was attended by energy minister Imtiaz Shaikh, advisor to CM Murtaza Wahab, PSCM Sajid Jamal Abro, secretary for energy Musadiq Khan, MD Thar Coal & Energy Board Tariq Shah, SECMC President Ghayas Khan, SECMC CEO Abul Fazal Rizvi, Sino Sindh Resources Ltd (SSRL) Director Li Jigen, SSRL Deputy CEO Huang Jinting, SSRL Deputy Head (Finance) Li Hongtu, SSRL Deputy CEO (Industrial) Zhang Hongpeng and others.

The chief minister said this was a New Year gift his government was giving to the people of Pakistan, particularly of Sindh. “The development of Thar and making Pakistan an energy self-sufficient country was the dream of former prime minister Benazir Bhutto,” he said.

Shah said the first threat to the national development was terrorism and the second and more dangerous one was energy crisis. “We crushed the terrorists who were the enemies of Pakistan and then focused on development of Thar coal to generate electricity and now we are also succeeding in defeating the darkness of load-shedding,” he said.

It may be noted that the Sino Sindh Resources Ltd, a Chinese company, has achieved a financial close of $1,060 million for development of 7.8 million tons per annum (MTPA) coal mine in Block-I of Thar Coalfields. The mine will supply this coal to 1,320 MW of coal-fired power plant which will bring in another $2 billion of foreign direct investment.

Another financial close of $215 million has been achieved for developing the second phase of 3.8 MTPA coal mine as an expansion to the first phase of the Sindh Engro Coal Mines Company (SECMC) in Thar coal Block-II, thus reaching 7.6 MTPA under both phases. Under the first phase of this, 660MW of power has already being generated. The second phase will also generate another 660MW with additional $1 billion of foreign direct investment.

It is pertinent to mention here that the Sindh government owns 55 per cent shares of the SECMC while ENGRO has 12 per cent shares, Thal Ltd has 12 per cent, the HBL has 9.5 per cent, and two other partners are in shareholders.

The third achievement is the announcement of contract stage of first year tariff of $42.45 per ton of Thar coal by the Thar Coal Energy Board for mines of size 7.8 MTPA.

The chief minister said with this tariff, Thar coal will provide energy to the country at $3.8 per MMBTU in two-year time.

It may be noted that any new domestic gas reserve will provide energy at almost $7 per MMBTU and Pakistan imports LNG at $10-12 per MMBTU.

The chief minister acknowledged the support of the CPEC framework for financing the projects in Thar. For every 3.8MTPA mine, the Sindh province gets royalty of about $20 million per annum indexed with the coal tariff.

“This amount of $20 million is being spent on the social and economic uplift of the people of Thar,” he said.

The CM said Thar coal price was fast becoming competitive and in near future clean coal technologies would be employed for coal to liquids (diesel) and surface gasification leading to urea production plants would be set up under CPEC in Block-VI of Thar coal fields.

“That initiative will then revolutionise Pakistan's energy sector,” he said.