ISLAMABAD, Oct 27: The federal government on Thursday approved setting up of about 3,000-mw of thermal power projects in the private sector with an estimated total investment of more than $2 billion.

A decision to this effect was taken at a meeting of the board of directors of Private Power and Infrastructure Board (PPIB) presided over by Minister for Water and Power Liaqat Ali Jatoi.

The board also decided to process the project proposals on a fast track basis to avoid power shortfalls in the next couple of years.

The board decided to issue letters of support (LoS) to 200-mw Orient Power Project to be located at Balloki near Lahore and 123-mw Star Power Project at Daharki in Sindh. The construction work on these two projects would start in a couple of months.

The PPIB board also approved in principle the issuance of letters of interest (LoIs) to five independent power producers (IPPs), which are already operating in the country, to set up additional plants of 1,125-mw.

The board noted that the existing IPPs were best placed to provide additional power in the minimum time and at competitive tariff and hence their specific project proposals would be processed on a fast track basis.

From amongst these IPPs, Kot Addu Power Company has proposed to add 400-mw, AES Corporation 225-mw, Southern Electric Power Company 100-mw, Gul Ahmad Energy 200-mw and Tapal Power 200-mw.

The board also appreciated the power project proposals submitted by leading local industrial groups for investment. The board was informed that local companies who have submitted proposals were of good financial standing and have diversified business experience.

Four proposals with a total capacity of 1,450-mw have come from Nishat Group, Atlas Group, Ibrahim Group and Gulistan Group were also approved in principle for further processing by the PPIB.

Another proposal of Engro Group for setting up of 150-mw project at Daharki based on 75-mmcfd (million cubic feet per day) of permeate gas was also approved by the PPIB board.

Moreover, in order to encourage utilization of indigenous coal resources, the board also approved issuance of LoI for 200-450 mw of power generation projects based on Lakhra coal mines in Sindh province.

The minister asked the PPIB to seek more investment proposals from the existing IPPs as well as leading local business houses to meet growing power demand in future.

He said the government would extend all possible assistance and support in all respects to the investors and all bottlenecks would be removed to facilitate them for making more investment in expansion of power generation capacity.