First private sector transmission line achieves financial close

The $1.66 billion transmission line is being developed under CPEC

ISLAMABAD: First high voltage direct current (HVDC) transmission line project of Pakistan, which will be 878 kilometres long, extending from Matiari to Lahore, has achieved a financial close. The project entails an investment of $1.658 billion.

This was announced on Wednesday at a signing ceremony held at the Power Division. The documents were signed and exchanged by the Private Power and Infrastructure Board (PPIB) Managing Director Shah Jahan Mirza and the Chinese company’s Chief Executive Officer Wang Bo.

This HVDC transmission line project is being developed under the framework of the China-Pakistan Economic Corridor (CPEC) agreement, and is another landmark achievement surfaced as a result of the efforts and facilitation of PPIB, Power Division, NTDC and other stakeholders.

It is not only the first HVDC transmission line project in Pakistan, but also the first private sector transmission line project facilitated by PPIB, under the government of Pakistan’s Policy Framework for Private Sector Transmission Line Projects 2015.

China Electric Power Equipment and Technology Company Limited (CET), which is a subsidiary of State Grid of Corporation of China (SGCC) is the main sponsor, responsible for execution of the project through formation of a special purpose company, including Pak Matiari-Lahore Transmission Company (PMLTC).

PPIB issued a letter of support (LOS) on August 4, 2017 and the National Electric Power Regulatory Authority (Nepra) granted a special purpose transmission license on February 18, 2018 to PMLTC for the project.

After fulfilling the mandatory prerequisites and completing all financing arrangements, the project has successfully achieved the financial close. The project, which is scheduled to achieve commercial operations by March 2021, would be executed on build-own-operate-transfer (BOOT) basis, and will be transferred to NTDC after a term of 25 years.

This transmission facility will primarily be utilised to transmit power generated from indigenous Thar coal-based power generation projects, thus enhancing the share of indigenous fuel-based generation and saving significant amount of foreign exchange.

With the medium and long term plans of power induction into the national grid, it is important that the power transmission infrastructure is made available to transport the electricity from the power generation facilities to the load centres.

Speaking on the occasion, Minister for Power Division Omar Ayub briefly informed about the benefits of the project.

He said the government is focusing on energy security and power generation from indigenous resources. Currently, 60% electricity is being generated through oil and gas and we have planned to change the energy mix and generate 30% from renewable resources by 2030, he added.

The generation capacity in 2030 will be 55,000MW and 18,000MW will be generated through renewable resources.

Appreciating the project, Chinese Deputy Chief of Mission in Pakistan Lijian Zhao said the sponsor company is well experienced and capable of completing this project, which will create 6,000 jobs.

Published in The Express Tribune, February 28^th, 2019.

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