Siddiqsons plans $760 million investment in energy generation

KARACHI: Pakistan’s major business house Siddiqsons Group is investing $760 million to set up various energy generation projects in the country that will add more than 400 megawatts of electricity to national grid by 2018, its official said.
“As part of our obligation towards the country, Siddiqsons has embarked on a plan to develop an energy generation chain, comprising a $600 million 350MW coal-fired plant at Port Qasim Karachi, a $80 million 50MW solar power plant in Chakwal and a $80 million 35MW run-of-the-river hydel plant in Azad Kashmir,” Shahid Mehmood, Project Director Siddiqsons Energy (SEL) told The News.
The 350 MW imported coal-fired supercritical power plant is being set up on fast-track basis under the upfront tariff regime, prescribed by the National Electric Power Regulatory Authority (NEPRA).
Mahmood said local banks agreed to fund the debt portion of the project and its financial close is expected end of this year and its commissioning is expected by the end of 2018.
“We are in the final stages of selecting the EPC (engineering, procurement and construction) contractor,” he said. “We have received bids from five Chinese firms and one of those would be finalised soon.”
Moreover, the company is also negotiating with the leading coal suppliers to meet the plant’s need of 3,000 tons of coal per day. The coal will be imported from Indonesia or South Africa.
“We will be using the finest quality semi-bituminous coal,” Mehmood said adding that coal is the only solution to the country’s energy problems.
Siddiqsons Energy obtained a letter of intent (LOI) from the Private Power and Infrastructure Board (PPIB) on February 13, 2015. The company has progressed towards the early implementation of its coal power project.
The National Dispatch and Transmission awarded the power purchaser consent, NEPRA granted generation licence and upfront tariff, Sindh Environment Protection Agency gave no objection certificate and PPIB released letter of support to the SEL within seven months since the receiving of the LOI.
SEL has decided to deploy European equipment, including boilers, steam turbines and generators for the project, Mahmood said
He added that this will be an exemplary coal power plant for its efficiency and environment- friendliness.
He said circular debt will pose challenge to coal-based power plants.
“Circular debt is there, but the government has never defaulted. Besides, the declining oil prices vis-à-vis reduced import bill has provided the government with enough room to address this issue,” he added.
About the 50MW solar plant, Mahmood said it is at an advanced stage and will be commissioned in 2017. He added that the 35MW hydel project is at a preliminary stage.
“SEL is determined to support the government of Pakistan to achieve its goal of reducing capacity shortfall by 2018,” Mahmood said.
“Energy must be readily available, affordable and reliable to spur economic growth and to maintain high levels of economic performance. This will minimise vulnerability to long- or short-term disruptions and coal-based projects are the key to achieve this target.”