Thar: SECMC unveils plans for five more coal-fired plants

Published: December 1, 2016

KARACHI: Sindh Engro Coal Minning Company (SECMC) Chief Executive Officer Shamsudin Ahmed Sheikh has informed that five more coal-fired power plants would be set up in block II of Thar by December 2021 and the total production capacity of coal based electricity of Thar would be expanded to around 3,000 megawatts.

He was talking to a group of journalists in Islamabad at the site of the project in Islamkot, Tharparkar, said a statement issued here on Wednesday.

He informed that the coal mining project’s total cost was $845 million which would be on the basis of 75:25 debt to equity ratio and would consist of 31.5% foreign and 68.5% local debt.

“The main sponsors of the project are Sindh government with 54.7% share, Engro and Thal Limited with 12% each and Habib Bank Limited (HBL) with 10%,” he remarked.

Sheikh said that the total cost of the two 330 MW mine mouth power plants would be $1.1 billion with 75:25 debt to equity ratio and it would consist of 75% foreign and 25% local debt.

The main sponsors of the project, he added, were Engro with 50.1% share while its other shareholders were Liberty, HBL and China Machinery Engineering Company (CMEC) and others.

He said that the Sindh Government had been a key enabler for the Thar project and has committed $110 million equity investment for phase-I and has provided a backup for sovereign guarantee to the federal government of $700 million.

He said although the initial cost of the electricity per unit would be higher (10 cent per unit in the first year) but it would gradually reduce with the passage of time and after about 6-8 years the production cost per unit would be as low as 6 cent which would be even lower as compared to that of hydel power.

The SECMC CEO informed that since the financial close of phase-I in block-II, interest in setting up Thar Coal based plants had surged and major industrial houses of the country and prominent Chinese investors had expressed an interest in obtaining coal from SECMC to set up power projects.

Published in The Express Tribune, December 1st, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (4)

  • poor taxpayer
    Dec 1, 2016 - 5:02AM

    Thar Coal is so shitty that you have to build power plants at the mine site because BTU content doesn’t warrant transportation – that’s a fact that has yet to be formally acknowledge in Pakistan media. Maybe now its time to focus on that fact that Thar Coal is located in the middle of “nowhere” and will take enormous sums to even integrate the Thar Power plants into the national grid. Obvious stuff to anyone familiar with coal mining or electric generation/distribution – seldom gets a voice in Pakistan media. The real question is whether any of it makes economic sense — and I have never/ever read an article which justifies a major project based on it’s economics. Recommend

  • Rustam
    Dec 1, 2016 - 12:35PM

    @poor taxpayer:
    If Thar Coal Mining Project would have been an enterprise of Sind Government only, I would have believed you. However, as there is direct participation of the big and trustworthy names of the private sector like Engro (read Dawood Group), Thall (read Habib Group) in its equity, it provides very high level of comfort to tax payers and others Therefore, please do not go on harping the same doubts in your comments as and when a news article appears about Thar coal mining Project, except your agenda is to spread the pessimism on economic initiatives in Pakistan. .
    If you are still not convinced throw the challenge to Engro, Thall and Habib Bank through writing them directly and/or letters to editors.
    Let us have useful intellectual discussion and let us not spread only pessimism based on half knowledge. Recommend

  • Rustam
    Dec 1, 2016 - 12:40PM

    The headlines talks of plans for five more coal-fired plants in this APP provided news. However, in its body, there is no detail except of one project with 2×330 MW power plants. Recommend

  • Muzzammil
    Dec 1, 2016 - 12:57PM

    @poor taxpayer: The concerned you mentioned have been appearing in the media time and again, and are very significant. Mine mouth power plant is the most economical solution considering all the factors, unless we decide not to utilise this resource at all. Recommend

More in Business