330MW Thar coal achieves financial closing

Business Recorder/31-01-2020

ISLAMABAD: Hub Power Company’s 330MW Thar coal-fired power plant achieved financial closing on Thursday, signing of which was witnessed by the Minister for Power, Omar Ayub Khan, with other senior officials of Power Division, PPIB and the company. The financial closing documents for the 330MW mine mouth lignite coal power project at Thar Block-II were signed by managing director PPIB Shah Jahan Mirza, and chiefexecutive officer (CEO) of M/s Thar Energy Limited Saleemullah Memon. Earlier, the Implementation Agreement (IA) was signed on November 10, 2017. M/s Hubco, Fauji Fertilizer Limited and China Machinery and Engineering Corporation are jointly sponsoring the project under the China-Pakistan Economic Corridor (CPEC) framework. The total cost of the project is $ 497 million while China Development Bank and Habib Bank Limited are the lead lenders. The project will utilize Thar coal supplied by 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/ton to $44/ton, which will significantly reduce the power tariff by cents 1.6/KWh (ie, around Rs 2/KWh). After commercial operation of the project, around Rs 18 billion per year would be saved on account of foreign exchange while Rs 260 billion per year would be saved by year 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/KWh.