Chinese President Xi Jinping is expected to visit Pakistan on April 10, 2015 to witness the signing ceremonies of different projects, including power sector projects. Well-informed sources told Business Recorder that the major issues with regard to different projects were sorted out during the recent visit to China of a delegation led by Chief Minister Punjab Shahbaz Sharif.
In February 2015, a delegation visited China. The delegation met China's National Energy Management and apprised them that Pakistan has reached an advanced stage in projects preparation.
The sources said Additional Secretary Incharge Ministry of Water and Power, Younus Dagha informed the Chinese side that power sector projects including three coal projects (Port Qasim, Engro and Sahiwal Wind), two hydropower (840 MW Suki Kinari and 720 MW Karot), three wind (Dawood Hydro China 50 MW), UET (100 MW), Sachal (50 MW) and one solar (Bahawalpur) are at an advanced stage of preparation. Engro's block I project has not reached an advanced stage. Sukki Kinari has reached near financing agreement, ie, at implementation stage. Its Commercial Operation Date (CoD) is 2020.
The coal projects have already crossed the stage of security documents. They will be provided letter of support which implies they will sign Implementation Agreement (IA) and Power Purchase Agreement (PPA) with the Government of Pakistan (GoP). M/s Engro is expected to sign a term sheet in the presence of the Chinese President.
According to sources, three wind projects can achieve financial close before the Chinese President's visit. Chinese side had sought a list of projects that could be formalised during the visit of the Chinese President to Pakistan.
According to sources, a delegation of NEA and Sinosure is also expected to visit Pakistan to finalise arrangements prior to the visit of the Chinese President.
The major issue of Solar Park (Bahawalpur) was tariff determination, security documents and configuration of the project for generation licences.
"I guess that Solar Park project will also sign Implementation Agreement," the sources continued.
The sources said all the power sector projects which are at advanced stage are moving towards due diligence with banks to generate funding.
Some projects such as the three wind projects have crossed due diligence stage and now the banks will scrutinize their documentation.
The sources said, Chinese banks have agreed to offer green channel for power sector projects which are at an advanced stage. "We are expecting that funding process which takes three to four months will be reduced to one month by using the clout of the Chinese President," the sources continued. M/s Hub Power Company (Hubco) has expressed its intention to sign Joint Venture Agreement during the visit of Chinese President. Engro wants a joint venture with Shanghai Electric.
Commenting on power transmission line project, the sources said, as wind projects and coal projects will be completed, a separate transmission line would be required.
The Government has started negotiations with China for financing of transmission line project from Mitiari (Sindh) to Lahore and Faisalabad. The project's feasibility has already been completed.
According to the policy, a transmission line company will be established in the private sector which will get tariff from National Electric Power Regulatory Authority (Nepra).
Comments
Comments are closed.