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business
Tuesday Nov 15, 2016
By
Web Desk

Thar coal power plant to kickstart by June 2019

By
Web Desk
Thar coal power plant to kickstart by June 2019
File photo

ISLAMABAD: The first phase of the Thar Coal-Fired Power Projects of 660MW would begin commercial operations by June 3, 2019 instead of October 2019, said Shamsudin Ahmed Sheikh, chief executive officer of Sindh Engro Coal Mining Company (SECMC) on Monday.

Sheikh said the financial close of the project was achieved on April 4, 2016 and since then 10.2 percent of the total work had been completed. He said work on the power plant and coal mining was going on simultaneously.

“This is the first coal-fired power project in Thar, and it is one of the leading energy projects of China Pakistan Economic Corridor,” Sheikh said, and added this was also the only energy project with a majority private sector sponsorship.

Sheikh informed that under the second phase, two more power plants (330MW each) would be completed by December 2019, as the SECMC had committed to off take coal for phase II (7.6 million ton per acre) to Thal Limited and Hubco for setting up plants at block II.

"The SECMC also planned to add additional capacity of 11.4 million ton per acre coal beyond phase II by December 2021," he said.

Sheikh said five more coal-fired power plants would be set up in block II of Thar by December 2021, expanding the total production capacity of Thar coal-based electricity to around 3,000MW.

He said the coal mining project cost was $845 million which would be on the basis of 75:25 debt to equity ratio and would consist of 31.5 percent foreign, and 68.5 per cent local debt.

The main sponsors of the project were Sindh government with 54.7 percent share, Engro and Thal Limited with 12 percent each, and Habib Bank Limited (HBL) with 10 percent share.

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

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

He said the Sindh government had been a key enabler for the Thar project, which committed 110 million equity investments for phase I and provided a backup sovereign guarantee to the federal government of $700 million.

He 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.

--Originally published in The News