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Thread: Thar coal Project: Pakistan Energy Future

  1. #21
    Senior Member ArshadK's Avatar
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    Apr 2014
    Pakistan Pakistan

    Re: Thar coal Project: Pakistan Energy Future

    We have no choice but to use what we have

  2. #22
    Member cb4's Avatar
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    Apr 2014
    Pakistan Pakistan

    Thar coal power plant to start production by March 2015

    The commercial production from Thar coal-fired power generation plant will be ready by June 2018 provided the financial closure is completed by March 2015, said Sindh Engro Mining Company (SECMC) Chief Executive Officer Shamsuddin Ahmed Sheikh.

    “We are the biggest investors in energy and coal mining with an investment of US $2 billion in the country,” Sheikh told media during their visit to Tharparkar coal mines,” said a statement issued on Thursday. The visit was organised by Engro Company (PVT) Limited to enable the journalists to see themselves the progress of the project of national importance.

    Shamsuddin told the reporters: “Prosperity is inevitable for the people of Pakistan and Thar through exploration of the seventh largest coal mine resources blessed by Allah Almighty to this country.”

    He said this year both Prime Minister Nawaz Sharif and former president Asif Ali Zardari jointly inaugurated the Thar coal mine for cheap generation of electricity to the people and all the political parties including the Pakistan Tehreek-e-Insaf (PTI) were supporting this mega project of national interest.

    Shamsuddin appreciated the federal government for including Sindh Thar coal project in Pak-China Economic Corridor and one of the priority areas in the economic development of the country. Sheikh urged the government for implementing the incentive package announced by the Economic Coordination Committee of the Cabinet (ECC) including concessionary import of machinery and other equipments required for the exploration of coal mining at Thar.

  3. #23
    Member cb4's Avatar
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    Apr 2014
    Pakistan Pakistan

    Minister says Thar coal will be country’s main energy producer

    Khawaja Asif says govt to begin two coal power generation projects in Thar
    Letter of Interest issued to 660MW coal power project

    Federal Minister for Water and Power Khawaja Asif on Thursday said the government was committed to utilising all resources for power generation, adding that abundant coal reserves remain largely unexploited and the government was now focussing on tapping these resources and making Thar coal the country’s main energy producer.

    Addressing reporters after witnessing ceremony in which the Private Power and Infrastructure Board (PPIB) issued Letter of Interest (LoI) to EngroPowergen Limited (EPGL) for development of 660 MW Thar Coal Power Project.

    Asif said that it is the government’s priority to develop Thar coal and utilise it on commercial basis. He said that Thar, which is presently a drought and famine-hit region, would become the country’s energy capital after completion of the power projects.

    On the power sector, the minister said that due to effective measures taken by the present government, the duration of load shedding has been reduced to three to four hours.

    “Concrete steps are being taken to reduce the transmission and distribution losses,” he said, adding that recoveries had improved and circular debt issue was also being resolved. He said that some power projects would also be initiated on LNG and would be completed in three years.

    Earlier, PPIB issued LoI to EngroPowergen Limited for the development of 660 MW Thar Coal Power Project.

    The document was signed by PPIB Managing Director Shah Jahan Mirza and EPGL CEO Shamsuddin Shaikh.

    The PPIB Board in its recent meetings accorded approval for processing the subject project under the “Guidelines for setting up of Private Power Projects under Short Term Capacity Addition Initiative-August 2010″ and approved issuance of LOI to the sponsors upon fulfillment of all requirements as per the Guidelines.

    EngroPowergen will develop a project of 660 MW (2 x 330 MW each) utilizing indigenous Thar lignite coal to be supplied by Sindh Engro Coal Mining Company which is the lease holder of Thar Block-II.

    The project is the first and pilot project to utilize Thar coal for power generation and its development will reduce Pakistan’s dependence on costly oil based power generation thus saving millions of dollars of foreign exchange. It is expected that the project will start its commercial operation by December 2017.

  4. #24
    Facebook Editor safriz's Avatar
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    Jul 2012
    Pakistan Pakistan

    Thar coal project. Financial hurdles removed

    KARACHI: The National Electric Power Regulatory Authority (Nepra) has approved upfront tariffs for brand new coal-fired power plants in Thar, thus, removed a key hurdle to the investors’ plans to finance projects in the rigid desert projects under Pak-China Economic Corridor.

    The return on equity (RoE) of 30.65 percent/annum has been allowed for the projects having construction period of 40 months and 34.49 percent/annum for the projects having a construction period of 48 months.

    Nepra has notified upfront tariff of 8.5015 cents/unit for Thar coal-based power projects of 330 megawatts on foreign financing, while tariff for similar capacity projects on local financing has been fixed at 9.5643cents/unit.

    The upfront tariff will be 8.3341 cents/unit for coal-fired power projects of 660 megawatts on foreign financing, while tariff for similar capacity projects on local financing has been fixed at 9.5668 cents/unit.

    The upfront tariff will be 7.9889 cents/unit for power projects of 1,099 megawatts on foreign financing, while tariff for similar capacity projects on local financing has been fixed at 9.1368 cents/unit.

    The tariff period is 30 years and will be applicable only for the mine-mouth projects in Thar area.

    The sponsors of the plant will be allowed to select plant of any technology based on the quality of coal as far as the minimum efficiency thresholds are ensured.

    The regulator has calculated capital cost for coal-based power project of 330 megawatts at $408.245 million; $767.868 million for 660 megawatts plant and $1.192 billion for 1,099 megawatts plant.

    The capital cost for the coal-based power project includes cost of main plant equipment system, boiler, including auxiliaries, balance of plant equipment system, other mechanical equipment system, electrical equipment system and coal handling infrastructure, engineering and project management, erection and commissioning, land, site development and civil works, transportation and evacuation cost up to inter-connection point.

    Under the foreign financing originating from Chinese banks, upfront Sino sure fee of 7.0 percent on the total debt servicing (including principal and mark-up for the entire loan tenor) has been included in the project cost.

    The project cost will be adjusted at the time of commercial operation date (COD) on the basis of actual Sino sure fee subject to maximum of 7.0 percent. In case the sponsor managed better alternative Sino sure fee arrangement, the same will be considered at the time of COD

    An official said no withholding tax on local foreign contractors, sub-contractors, supervisory services and technical services provided by foreign (non-residents) entities has been assumed, adding, the actual expenditure on this account will be included in the project cost at the time of commercial operations on the basis of verifiable documentary evidence.

    Construction period for the generation facility having a capacity of up to 330 megawatts will be 40 months and 48 months for the generation facility having a capacity of 660 megawatts and above.

    The sponsors of the project can arrange foreign financing in the US dollar, British pound sterling, euro, Japanese yen and Chinese yuan or in any currency as the government may allow.

    The upfront tariff has been determined on the basis of debt equity ratio of 75:25, while the minimum equity will be 20 percent and the maximum equity will be 30 percent; if the equity actually deployed is more than 30 percent of the capital cost, equity in excess of 30 percent will be treated as loan.

    The Chinese government and banks have committed to finance $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years, according to the deal signed by Prime Minister Nawaz Sharif during a visit to China recently.

    Both Sindh Engro Coal Mining Company and Sino Sindh Resources expect to achieve the financial close by June 2015 for their coal-mining and mine-mouth power projects.
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  5. #25
    Member cb4's Avatar
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    Apr 2014
    Pakistan Pakistan

    Chinese bank promises $1b for Thar coal mining

    KARACHI: Sino-Sindh Resources Private Limited, a mining company working on block-I of Thar coalfield, has said that it has been able to resolve financing issues as the Industrial and Commercial Bank of China (ICBC) has agreed to fund a major chunk of the project.

    “ICBC has issued a letter of interest for providing $1 billion in the form of a 10-year loan to help extract coal from block-I of Thar coalfield,” said Chaudhary Abdul Qayyum, Chief Executive Officer of Sino-Sindh Resources, while talking to a group of journalists.

    “This covers 75% of the capital cost of phase one of the project while 25% will be equity, which will be raised by a consortium,” he said. “We hope that the financial close will be achieved in the second quarter of this year.”

    Sino-Sindh Resources is a subsidiary of Global Mining (China), which has 55% shares. Asiapak Investments holds 40% shares and a Dubai-based company has a 5% stake.

    The company has been allotted Thar coalfield’s block-I, which is spread over 150 square kilometres, out of the total area of 9,000 square kilometres.

    It is expected to start coal extraction soon after achieving the financial close. Initially, 6.5 million tons of coal will be produced per annum from the block, which has estimated reserves of 2.5 billion tons. This coal production will be enough to run four power plants of 350 megawatts each.

    Coal extraction could be scaled up to 20 million tons per annum for its sale to other power plants or export to foreign markets.

    “On achieving successful financial close, commercial production of coal is expected to begin by the first quarter of 2018,” Qayyum said. “This coal is perfect for mine-mouth power plants, which will generate electricity at around 40% lower price compared to furnace oil.”

    The second and the most important phase is the production of 1,400MW – four plants of 350MW each – at the mouth of the mine and an estimated $2 billion capital will be required.

    Qayyum voiced hope that finances would not be a hurdle as the project will be executed by Shanghai Electric Corporation under the China-Pakistan Economic Corridor.

    “This will be the best use of coal; it will eliminate transportation cost, which could increase coal price up to $27 per ton. For mine-mouth power plants, a 2-2.5km conveyor belt will be required to transport coal from the mine to the power plants,” he said.

    As the mine achieves economies of scale and debt is paid off, the unit cost of coal will continue to decline, stabilising at $3.73 per million British thermal units from the 11th year. The levelised cost for block-I is $5.71 per mmbtu.

    The cost of electricity for the initial 10 years will be 8.5 cents per unit and when the loan period ends, the cost will come down to 6 cents per unit.

    Published in The Express Tribune, March 20th, 2015.

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