Thar power project: IA signed to generate $1.9 billion

The Implementation Agreement (IA) of Pakistan's largest Thar coal-based power generation project of 1,320 MWs capacity has been signed at Private Power and Infrastructure Board (PPIB) for generating financing of $ 1.9122 billion as the cumulative project cost.

The project is based on state of the art super critical technology. The signing of the agreement is yet another step forward on the resolve of the present government to encourage indigenous resources.

Shah Jahan Mirza, Managing Director PPIB signed the documents on behalf of the Government of Pakistan (GoP) and Meng Donghai, Chief Executive Officer of M/s Thar Coal Block-I Power Generation Company Limited (TCB-I) signed on behalf of his company. The signing ceremony was witnessed by Minister for Energy, Omar Ayub and senior officials of PPIB and the Project Company i.e. TCB-1. Earlier, the Power Purchase Agreement (PPA) of the project has already been executed.

The 1,320 MW Shanghai Electric Thar Block-1 Coal Project is being developed under the umbrella of China-Pakistan Economic Corridor (CPEC) through Project Company i.e. TCB-I while M/s Shanghai Electric Group Company is the main sponsor of this project. The project will utilize Thar Coal supplied by Sino Sindh Resources Limited which is executing coal mining operations for coal extraction in the Thar coalfield Block-I. Letter of Support has already been issued to the project by PPIB while financial closing is expected to be achieved very soon.

According to PPIB, it is anticipated that Shanghai Electric Thar Block-1 Coal Project will start generating electricity in March 2021. The project will be connected with the 660 +kV Matiari-Lahore HVDC transmission line project for power transmission. This transmission line project is also being implemented by PPIB under CPEC which is currently under construction and targeted to be operational by March 2021.

Being fully compliant with the World Bank/IFC standards, the addition of 1,320 MW of indigenous, affordable and reliable electricity will not only energize the national grid, it will also result in savings of foreign exchange of around 75 billion rupees annually on account of Fuel Cost, generate economic activities and employment opportunities for the people of Thar in particular and will also entail improvement of the basic infrastructure in the vicinity of these projects. Further, this will boost the confidence of the investors who are interested in Thar coal mining and power generation.

PPIB as the lead organization of the GoP in developing indigenous resources like Thar coal and hydro for power generation has so far achieved considerable success which includes commissioning of Pakistan's first Thar coal based 660 MW Engro Powergen and two hydro IPPs namely 84 MW New Bong and 147 MW Patrind. Exploration of Thar Coal is opening a new chapter in the energy history of Pakistan and PPIB has been quite successful in implementing another six Thar coal based power projects of 4,290 MW which are at different stages of development.