ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday approved upfront tariff for $1.9 billion coal-based power project of China-Hub Power Company at a levelised tariff of 8.36 cents (Rs8.12) per unit for 30 years.

The 1,320-megawatt project is a joint venture of Hub Power Company (Hubco), which currently operates the country’s largest 1,290MW thermal power station at Hub in Balochistan besides other smaller projects, and China Power International Holding Limited (CPIH), a wholly-owned core enterprise of China Power Investment Corporation.

The project is one of the priority projects of $46bn China-Pakistan Economic Corridor (CPEC). The joint venture company — China Power Hub Generation Company (Pvt) Limited (CPHGCL) — will jointly develop two 660MW plants near Hubco’s existing plant to run on imported coal.

In its determination, Nepra said the average tariff for one unit of 660MW would have an average tariff of 9.064 cents per unit for first 10 years that would subsequently come down to an average of 7.042 cents for 11-30 years. The levelised tariff for 30 years was approved at 8.36 cents per unit.

Nepra said the company had applied in December 2015 for the unconditional acceptance of upfront coal tariff for up to 660MW imported coal on foreign financing determined by the regulator in June 2014 and approved in October 2014 with all the terms, conditions and assumptions of the said tariff.

The application was processed in accordance with the relevant provisions of the regulations and finally granted upfront tariff for 660MW on foreign financing.

However, the heat rate and interest during construction (IDC) would be conducted on the basis of two plants as a whole and the relevant components will be adjusted accordingly.

The project will have a debt-equity ratio of 80:20. Its cost will go up to $2.4 billion because of an ancillary coal jetty to enable transportation of imported coal.

The company had already completed the feasibility study, along with the field investigation and geo-technical investigation for plant and the jetty.

The company expects to achieve the financial close of the project by June 2016 and complete the project in 2020. The Hubco will have 49pc shares in the project and China International 51pc.

Published in Dawn, February 17th, 2016