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 chief executive officer(CEO) of M/s Thar Energy Limited Saleemullah Memon.

Earlier, the Implementation Agreement (IA) was signed on November 10, 2017. The project is being jointly sponsored by M/s Hubco, Fauji Fertilizer Limited and China Machinery and Engineering Corporation 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.

An official statement says that the sponsors are very keen to complete this project by March 2021 and for achieving this target, they have already started construction activities ahead of financial closing and as a result so far 40 percent work has already been completed.

The project will be connected with the Matiari-Lahore Transmission Line for transmission of electricity. Being developed on state of the art coal technology, the project complies with all international as well as federal and provincial environmental standards.

PPIB claims that the development of the project will also contribute towards socio-economic uplift of downtrodden Tharparkar which is emerging as energy capital of Pakistan.

In addition to Thar coal based power generation projects of 5000MW, PPIB is currently handling 17 hydropower projects of 6,550MW in the private sector which are at different stages of implementation.

By 2022, PPIB is targeting to fetch more than 6,500MW through completion of eleven projects with the majority based on Thar coal and hydro. PPIB is also implementing Pakistan's first private sector +660 kV Matiari-Lahore Transmission Line Project which is also the first HVDC project aiming at transmitting electricity from coal projects in the southern zone to the load centers. This project is also under construction and targeted to be completed by March 2021.

The minister welcomed signing of documents and expressed that the addition of 330MW will further contribute in achieving sustainability and reliability in the power sector.