ISLAMABAD, May 8: The Private Power and Infrastructure Board (PPIB) on Tuesday decided to issue a letter of interest (LoI) to sponsors of a $1.5 billion 1,000-megwatt coal-fired project in Thar.

The board’s meeting, presided over by minister for Water and Power Liaquat Ali Jatoi, was informed that the Sindh government had already granted the sponsors, Hassan Associates, a licence to explore a 64-kilometre area in Thar.

Sources said the company’s owners had recently held meetings with Prime Minister Shaukat Aziz and won over his sympathies on the grounds that the company could put together investors and execute the project but a condition in the power policy barred it from going ahead.

The group sponsors, who are also one of the major stakeholders in the privatised Karachi Electric Supply Corporation, had been under investigation in the Nawaz Sharif government relating to setting up of an independent power project during the Benazir government. No formal case could, however, be established against the group.

Under the power policy, the net worth of the main sponsor should be at least $30 million while the net worth of the main sponsor and other sponsors should be $114 million to execute the project.

Hasan Associates’ net worth, the sources said, was significantly lower but because financially strong groups were not forthcoming, it was considered prudent to relax some rules.

Farooq Hasan, head of the group had said that he (Mr Hasan) and his company should be considered as main sponsors and allowed to be responsible ‘jointly and severally’ to develop the project.

The group was of the view that it had enough financial resources to undertake the project. Sindh government had already leased out a piece of land to the group.

After the April 10 meeting of the group with the prime minister, the company was advised to submit a formal proposal to the PPIB.

The prime minister ordered that there should be no special tariff for the project and Hasan Associates should be ‘facilitated within the realm of reasonableness’ in the development of their project.

The PPIB meeting was also attended by Irfananullah Khan Marwat, Sindh minister for mines and mineral development, secretaries of water and power and petroleum, Wapda chairman and the NWFP chief secretary.

An official statement said the meeting noted with satisfaction that the pace was picking up on development of hydroelectric resources for power generation and a total of 22 hydropower projects capable of generating about 5,700MW were being processed.

Since most of the hydropower resources were concentrated in the north of the country, the NWFP chief secretary assured the meeting that the provincial would fully facilitate project developers.