PPIB Declares Financial Close Of 330MW Thar Coal Power Project
Islamabad: The Private Power and Infrastructure Board (PPIB) declared on Thursday the financial closure of 330-megawatt Thar mine lignite coal-based power generation project.
Power Minister Omar Ayub Khan witnessed the signing ceremony of the financial close documents. Senior officials of the Power Division, PPIB and the Thar Energy Limited were also present on the occasion.
PPIB Managing Director Shah Jahan Mirza and Thar Energy Limited Chief Executive Officer Saleemullah Memon signed the documents on behalf of their respective organizations.
Earlier, the Implementation Agreement (IA) of the project was signed on November 10, 2017. The project situated at Thar Block-II is being jointly sponsored by the HUB Power Company Limited, the Fauji Fertilizer Limited and the China Machinery and Engineering Corporation under the China-Pakistan Economic Corridor (CPEC) framework.
The total cost of the project is $497 million while the China Development Bank (CDB) and Habib Bank Limited (HBL) are its lead lenders.
The project will utilize Thar coal supplied by the Sindh Engro Coal Mining Company (SECMC) from its second phase mine and after implementation of this project, overall coal price (SECMC) would be reduced from $64/tonne to $44/tonne, which will significantly reduce the power tariff by cents 1.6/KWh (i.e. around Rs2/KWh).
After commercial operations, around Rs18 billion per year would be saved on account of foreign exchange while Rs260 billion per year would be saved by 2022 when all Thar coal-based projects of 5,000MW would be operational. As a result, electricity tariff would be reduced to around Cents 5/KWhr.
The sponsors are very keen to complete this project by March 2021 and to achieve this target, they (sponsors) have already started construction activities ahead of financial closing. As a result, 40pc work has already been completed so far.
The project will be connected with the Matiari-Lahore Transmission Line for transmission of electricity.
Minister Omer Ayub Khan welcomed the development and hoped that the addition of 330MW would further energize the national grid and contribute to achieving sustainability and reliability in the power sector.
“In the quest of harnessing indigenous and renewable potential, every single megawatt is crucial for redefining Pakistan’s energy landscape and securing its energy future on an indigenous, native footing which will eventually relinquish Pakistan’s dependence on imported fuels,” he added.