Hub Power Company (Hubco) has announced that it will set up a 330-megawatt coal-based power project in Thar at a cost of $500 million in partnership with other investors, subject to approval of the Private Power and Infrastructure Board (PPIB).
“It would take one year to achieve financial close of the project after the PPIB gives its stamp of approval to the project,” Hubco Chief Executive Officer Khalid Mansoor told The Express Tribune.
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Hubco, in its unaudited financial statement for nine months ended March 31, 2016, said “the company has....applied for LOI (Letter of Intent) from the PPIB for developing the project.”
Utilising the coal supply option because of the company’s investment in Sindh Engro Coal Mining Company (SECMC), it is considering setting up the 330-megawatt mine-mouth power plant in Thar. SECMC is estimated to mine 3.8 million tons of coal per annum. Hubco is injecting $20-million equity in the SECMC mining project, it is learnt.
Mansoor said other investment partners in the power project had not yet been decided. Responding to a query about whether the investors would include foreign players, he said “if strategic partners show their interest, they would be taken on board.”
He revealed that the power project would kick-start commercial operations in around three and a half years after achieving financial close and that would be the time when SECMC would start extracting coal in Thar.
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According to the financial statement, SECMC has already achieved financial close in April 2016. “...SECMC has signed key financing agreements with Chinese and Pakistani lenders for loans of $634 million,” it stated.
Construction of 1,320MW plant
The CEO of Hubco also announced that the construction of two 660-megawatt imported coal-based power plants worth $1.8 billion in Hub, Balochistan would start in the third quarter of this year.
The project would be developed by China Power Hub Generation Company (CPHGC) - a joint venture between Hub Power Holdings Limited and China Power International (Pakistan) Investment Limited - a Hong Kong-based company established by China Power International Holdings Limited.
According to the financial statement, the Balochistan Environmental Protection Agency has granted CPHGC a no-objection certificate for initiating work on the power plants.
Earlier, Hubco conducted an environmental and social impact assessment study, with the assistance of renowned consultants Hagler Bailey and submitted a report to the environmental protection agency. This was followed by a public hearing as well.
“CPHGC has accepted the upfront tariff announced by Nepra for the coal-based power project,” the statement said.
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Hubco has a 26% stake in the CPHGC project. “However, it has the right to increase its equity to 49% by the commercial operations date,” it added.
Published in The Express Tribune, May 3rd, 2016.
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