Hub Power Company (Hubco) has reportedly expressed its intent to sign financial documents of 330 MW Thar Energy Limited (TEL) power project during Joint Coordination Committee (JCC) meeting to be held next week in Beijing, well-informed sources in the PPIB told Business Recorder. To set up a 330 MW mine mouth coal power plant at Thar Coal Block II Sindh, the company has established Thar Energy Limited, as a wholly-owned subsidiary of The Hub Power Co Ltd. TEL has informed the federal government that it has finalised its financing documents with the Chinese and Pakistani financial institutions. The company is now planning to sign documents shortly.
"Since TEL is one of the key projects under China-Pakistan Economic Corridor (CPEC), PPIB has been requested to get signing of TEL finance documents included in the agenda of Joint Coordination Committee (JCC) meeting which is scheduled to be held in Beijing on December 18-19, 2018. The company has requested authorities to arrange a small ceremony in front of delegates from Pakistan and Chinese side," the sources added.
The EPC contract for the project has been signed with China Machinery and Engineering Corporation (CMEC) which has started preliminary activities on site to expedite the project construction and achieve the RCOD as per the PPA in December 2020. The PPA and CSA for the project were signed on July 27, 2017 and May 13, 2017 respectively. The Implementation Agreement (IA) has been initialed while the Water Use Agreement (WUA) is also under execution.
TEL has executed Onshore Supply and Services Agreement, Offshore Supply Agreement, Power Purchase Agreement (PPA), Coal Supply Agreement (CSA), Water Use Agreement (WUA), Implementation Agreement (IA) and Supplemental IA (SIA) for the project.
Private Power and Infrastructure Board (PPIB) had extended TEL's Letter of Support (LoS) till September 8, 2018 for achievement of Financial Close. PPIB had also approved an extension in the required Commercial Operations Date (COD) of the company from December 31, 2020 to March 31, 2021 and an extension in long stop date for termination post RCOD from 400 to 490 days. TEL has also made payment for first mobilization advance to China Machinery Engineering Corporation (CMEC) amounting to $ 23.5 million under the Offshore Supply Agreement and has issued Preliminary Notice To Commence (PNTC) to CMEC and China East Resources Import and Export Corporation (Onshore Contractor). Onshore Contractor has commenced preliminary activities on TEL Site to expedite COD.
The company has signed a Shareholders' Agreement with Fauji Fertilizer Company Limited (FFCL) and CMEC Tel Power Investments Limited (CMEC Dubai) for equity investment of 30% and 10% respectively in the Project. FFCL has already injected equity in the Company on April 17, 2018. At present, the Company and FFC own 70 percent and 30 percent shares in TEL respectively.
To launch new initiatives, the company has formed wholly-owned subsidiaries. For investing in the imported-coal based 1,320MW power project and other future growth initiatives, the company has incorporated Hub Power Holdings Limited (HPHL). Hub Power Services Limited (HPSL), a wholly owned subsidiary, has been incorporated to manage O&M of its existing power assets, its future projects and explore onshore and offshore O&M business opportunities. Another wholly-owned subsidiary, Narowal Energy Limited, has taken over the assets and liabilities of Narowal Plant post its de-merger under the repealed Companies Ordinance, 1984.
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