ISLAMABAD: Pakistan and Gezhouba Group of China on Tuesday signed a memorandum of understanding (MoU) for setting up of total of four coal-fired power projects of 2,640 megawatts at Gadani with an estimated investment of $3.5 billion.

Simultaneously, another Chinese firm State Grid Corporation of China (SGCC), held meetings with Pakistani authorities for construction of transmission line from proposed Gadani Power Park to the national grid when the government announces shortly a transmission policy for private investment.

Water and Power Minister Khawaja Mohammad Asif witnessed the MoU signing ceremony.

President Gezhouba Group Chen Xiano Hua and Managing Director Private Power and Infrastructure Board N A Zuberi signed the MoU.

Under the MoU, China Gezhouba would install three projects of 660mw each (1,980mw) based on imported coal at Gadani. The company earlier this year had signed another MoU for a 660mw coal power plant at the same park.

Kh Asif said that Prime Minister Nawaz Sharif’s idea to set up a 6,600mw Gadani Power Park project had generated a lot of interest among the international and domestic investors.

He said the prime minister’s recent visit to China and meetings with Chinese leadership had encouraged large Chinese firms to make substantial investments in various sectors of Pakistani economy including power sector.

He said the Gezhouba was already involved in the construction of 969mw Neelum-Jhelum Hydropower project as lead contractor in collaboration with China National Machinery Import and Export Corporation and was also the engineering, procurement and construction contractor in the 840mw Suki-Kinari Hydropower Project.

He said it showed that the largest firm from abroad had great confidence in business opportunities in the country and was satisfied with overall investment sentiment.

Gezhouba is one of the largest business groups in China having stakes in large dams like the Three Gorges, Shuibuya, Jinping I, and Longtan Dam. It has business operations in over 70 countries in Asia, the Middle East, Africa and America. In 2012, it was ranked 62nd among the top 225 international contractors and 42nd largest contractor by revenue in the world.

Mr Asif said the China Ghezouba Corporation would set up the Gadani projects on independent power producer (IPP) mode and would be responsible for arranging financing for the project in close coordination with Pakistan Power Park Management Company Ltd and PPIB.

He said that since these upcoming power plants would require transmission line facilities for transmitting power to the national grid and required funding, the government had decided to announce a fresh transmission line policy very soon for attracting investment through IPP mode. Under the policy, the power sector would be responsible for arranging funding and laying of the pipeline and get wheeling charges to be approved by the National Electric Power Regulatory Authority (Nepra).

He said the PPIB and State Grid Corporation of China (SGCC) also had a meeting on broad parameters of the transmission line as the SGCC had shown keen interest to invest and lay high and low voltage transmission lines.