Engro’s Thar coal project may be delayed

Company likely to face difficulties in raising foreign finances.

KARACHI:

Engro Corporation’s flagship Thar coal project may face difficulties in securing foreign finances if the government fails to end gas shortages in the country, Khalid Mansoor, Chief Executive Officer of Engro Fertilizer Limited said here on Friday.

Briefing a group of reporters on the upcoming Thar coal project of Engro, Mansoor pressed the government to resolve the problem of gas shortage, otherwise, the present situation might lead to delay in crucial electricity projects as it would deter foreign investors.

Engro Corporation, one of the biggest conglomerates of the country, plans to produce electricity from the Thar coal project by 2016. This one-of-its-kind project needs investment of $3 billion.

The problem for Engro is its $1.1 billion fertiliser plant – the world’s largest – which is not producing enough fertiliser owing to disruption in gas supply. The plant for which Engro raised capital has become a big financial challenge for the corporation despite the fact that it has secured government guarantee on uninterrupted gas supply to the plant.

In this tight financial situation, the corporation’s plan to raise foreign capital for the Thar project may face hurdles.

Published in The Express Tribune, April 7^th, 2012.