660MW Thar coal based IPP achieves financial closing

ISLAMABAD: Lucky Electric Coal Power Project, a 660 MW Independent Power Plant (IPP), based on Thar coal has achieved financial closing on Monday.

The signing ceremony was witnessed by the minister for power, ministry of energy, Syed Ali Zafar, with other senior officials of the Power Division, Private Power & Infrastructure Board (PPIB) and the company.

The financial closing documents for the 660 MW power project were formally signed by Shah Jahan Mirza, Managing Director PPIB and I H Haqqi, Chief Executive Officer of M/s Lucky Electric Coal Power Project.

Read More: Thar coal power project to be operational by 2018 end: Ahsan Iqbal

The project will be located at Port Qasim near Karachi, and based on local coal from Thar, an investment of US$ 1080.9 million will be made for implementation of the project. This project will be equipped with the super critical technology and sea water will be utilized for cooling of the plant.

Lucky Power Project is being financed through Debt Equity ratio of 75:25%, with the sponsors being M/s Lucky Cement Limited while the lenders’ consortium of the Project consists of Habib Bank Limited, United Bank Limited, National Bank of Pakistan, Bank Alfalah Limited, Askari Bank Limited Soneri Bank Limited, The Bank of Punjab, Meezan Bank Limited, Faysal Bank Limited and Dubai Islamic Bank Limited.

Upon financial closing, PPIB will also issue sovereign guarantee on behalf of the government in favor of Project Company to secure the payment obligations of Power Purchaser. The achievement of financial closing will facilitate the project sponsors in initiating construction activities at site which will be concluded by March 2021 and project will start generating electricity thereafter.

The Sindh Engro Coal Mining Company (SECMC) which is the lease holder for execution of mining operations for coal extraction in the Thar coalfield, Block II, will supply coal to the project while the electric power generated from the project will be sold to CPPAGL under a 30 years Power Purchase Agreement.

Minister for Energy Syed Ali Zafar commented on the occasion that to improve power supply in the country to make it more robust and reliable, and reduce dependence on imported fuels, projects based on indigenous Thar coal assume further importance from energy security as well as economic perspective and advised PPIB to further exploit the Thar coal potential for power generation.

He also appreciated PPIB on achieving yet another major milestone with the financial closing of another Thar coal based IPP after 660 MW Engro Powergen.

Thar coal reserves estimated at 175.5 billion tons hold vital importance for generating thousands of megawatts of affordable electricity for decades to come.