Islamabad                -              Thar Coal based power generation project has Thursday achieved financial close and now the project is likely to be ready by March 2021.

The Financial Closing documents for the 330 MW mine mouth lignite coal power project at Thar Block-II were signed by Shah Jahan Mirza, Managing Director PPIB and Saleemullah Memon, Chief Executive Officer of M/s Thar Energy Limited. The signing ceremony for the financial close was witnessed by the Minister for Power, Omar Ayub Khan, with other senior officials of Power Division, PPIB and the company.

Earlier, the Implementation Agreement for the project was signed on 10th November 2017. The project is being jointly sponsored by M/s HUB Power Company Limited, Fauji Fertilizer Limited and China Machinery and Engineering Corporation under the China-Pakistan Economic Corridor (CPEC) framework. The total cost of the Project is US$ 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 2nd phase mine and after implementation of this project overall coal price (SECMC) would be reduced from $64/ton to $44/ton, which shall significantly reduce the power tariff by Cents 1.6/KWh (i.e. around Rs. 2/KWh). After Commercial Operation of this 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 5,000 MW would be operational. As a result, electricity tariff would be reduced to around Cents 5/KWh.

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 as a result so far, 40% work has already been completed. The project will be connected with the Matiari-Lahore Transmission Line for transmission of electricity.

The Minister for energy said that the occasion that this development and expressed that the addition of 330 MW will further energize the national grid and contribute in achieving sustainability and reliability in the power sector. In the quest of harnessing indigenous and renewable potential, every single megawatt is crucial for redefining Pakistan’s energy landscape and securing its energy future on an indigenous, native footing which will eventually relinquish Pakistan’s dependence on imported fuels, he added. The Minister in his concluding words appreciated the untiring efforts of the Power Division, PPIB and other stakeholders for achieving this milestone.