ISLAMABAD: The Private Power and Infrastructure Board (PPIB) — a one-window facility of the federal government — on Wednesday announced the $2 billion financial closing of the country’s largest Thar coal-fired power project, currently operational at Thar, by Shanghai Electric Corporation, China.

In a statement, the PPIB said the financial close agreement was signed by PPIB Managing Director Shah Jahan Mirza, Chief Executive of the project company Meng Donghai, Chief Executive Officer of Industrial and Commercial Bank of China (ICBC), Karachi Branch Zhou Bo.

Having a generation capacity of 1,320MW, the project has been implemented under the China-Pakistan Economic Corridor (CPEC).

The PPIB chief commended that to meet stringent timelines agreed by the governments of Pakistan and China, the project company commenced construction work in a crunch situation of Covid-19 by leveraging its equity and bridge financing and completed the project on Feb 5, 2023.

Shanghai Electric Group Corporation is the main project sponsor of the project, while Sino-Sindh Resources Ltd (SSRL) is the coal supplier from Thar Block-1 whereas ICBC, China Development Bank, Bank of Communications Co. Ltd., China Minsheng Bank Corporation, Postal Savings Bank of China Co Ltd. and Agriculture Bank of China are the lenders to the project. Chinese Sinosure is the insurer of the project.

The plant is based on state-of-the-art supercritical technology and is equipped with the latest equipment to fulfil environmental obligations and fully compliant with the environmental standards of the World Bank and International Finance Corporation (IFC) and Pakistan Environmental Protection Agency, the PPIB said, adding that the project is the second cheapest power project from the fuel cost point of view (i.e. Rs4.98/kWh).

Through its operations, the country saves precious foreign exchange of around $500 million annually. The project significantly contributed to reducing the overall basket price of electricity which may be translated to around Rs200bn annually while expected to generate nine billion units of electricity per year, according to the statement.

With the induction of this project, the total installed capacity of five commissioned Thar coal-based power projects has reached 3,300MW, a sign of increasing indigenous fuel-based power generation.

Published in Dawn, December 14th, 2023