Power project in Punjab achieves financial close
Potential loss of customers would severely dent the company’s financial sustainability, rendering it incapable of investing in Karachi’s power needs, the CEO said. PHOTO: REUTERS
The 1,263-megawatt Punjab Thermal Power Limited (PTPL) power project costing $708 million has achieved financial close.
The power plant located near Trimmu Barrage, Jhang district is based on re-gasified liquefied natural gas (RLNG) and so far it is the largest RLNG-based power generation project established under the Power Generation Policy 2015.
The financial close ceremony was held on Friday and it was attended by Federal Energy Minister Hammad Azhar and Punjab Energy Minister Akhtar Malik.
Financial close documents were signed by Private Power and Infrastructure Board (PPIB) Managing Director Shah Jahan Mirza and PTPL Chief Executive Officer Akhtar Hussain Mayo.
The project is being developed under the independent power producer (IPP) mode through PTPL, a private limited company owned by the government of Punjab through the Energy Department.
It is the second RLNG-based power project developed by the Punjab government through its own resources, the first being the Bhikki power plant, which has begun full-fledged combinedcycle commercial operations and generated over 9.3 billion units of electricity last year.
The project is being financed through 75% commercial debt arranged from local banks which include National Bank of Pakistan, The Bank of Punjab, United Bank Limited and Habib Bank Limited while total cost of the project is $708 million.
The plant has designed efficiency of 61.16% which is rated amongst the highest in the world.
It will result in fuel savings of billions of rupees to the national exchequer during its 30-year life span while bringing down the overall tariff.
Despite delay in financial close and the commissioning of project due to Covid-19 implications, the company behind the power plant adopted a proactive approach and started construction by injecting its own equity.
Owing to joint efforts of the government of Punjab, federal government, Power Division and PPIB, the plant has reached an advanced stage with completion of over 80% of construction work. Upon commissioning of the project, it will help in stabilising and balancing the transmission system to ensure uninterrupted supply to Faisalabad and adjacent areas.
The project will generate more than 3,000 employment opportunities during the construction phase and 2,000 during its operations.