ISLAMABAD: Finance Minister Abdul Hafeez Shaikh said on Thursday that Rs900 million had been approved for the Thar coal gasification project to generate 100MW of electricity.

He made the announcement after a meeting attended by Minister of Petroleum and Natural Resources Dr Asim Hussain and Dr Samar Mubarakmand, Member (Science and Technology) of the Planning Commission.

Dr Mubarakmand said at the meeting that success of the Thar coal project would encourage investment by leading international companies dealing with development of underground coal. According to him, several companies had shown interest in the project.

He said the first phase of the project would require $105 million for opening a letter of credit for the import of machinery and equipment. The project would be launched in the second week of September.

In April 2009, the Central Development Working Party had approved two projects; ‘Creation of new processing facilities (for production of coal gas by underground coal gasification)’ and ‘Creation of new processing facilities (for handling and purification of the gas)’ at a cost of Rs494.45 million and Rs490.48 million, respectively.

Dr Mubarakmand said work on the projects was in progress and the first 50MW gasifier had been completed.

He said no funds were allocated during the last financial year for a ‘2x50 MW power plant from Syngas (Integrated Gasification Combined Cycle)’. And in the current Public Sector Development Programme, only Rs5 million was allocated against a demand of Rs5,703 million.

The project to cost Rs8,898.7 million, with a foreign exchange component of Rs5,847.3 million, had been approved by the Executive Committee of National Economic Council on Dec 9 last year.

The scientist said the finance minister had now accepted the demand of Rs900 million for machinery and equipment keeping in view project’s importance and financial viability.