They join hands with Chinese firm for the 330MW project in Thar
KARACHI: Two Pakistan-based leading companies in the power and fertiliser sectors have joined hands with a Chinese state-owned firm for setting up a 330-megawatt coal-fired power
project in Thar, according to notices sent to the Pakistan Stock Exchange (PSX) on Thursday.
“Hub Power Company (Hubco) has signed a shareholders'agreement on March 15, 2018 with Fauji Fertilizer Company Limited (FFC) and China Machinery Engineering Corporation (CMEC) for equity injection into Thar Energy Limited by Hubco of 60%, FFC 30% and CMEC 10%,” Hubco Company Secretary Shaharyar Nashat said in a notice.
They signed the agreement in Islamabad. The proposed equity investment would be subject to obtaining all necessary corporate and regulatory approvals by the companies involved in the project, he added.
Hubco's share price inched up 0.05%, or Rs0.05, to close at Rs97.42 with 101,000 shares changing hands at the PSX.
FFC's share price dropped 0.47%, or Rs0.40, and closed at Rs85.59 with a volume of 482,000 shares.
“The power plant
, being a CPEC project, will be built under a special purpose company, Thar Energy Limited, and will be based on indigenous coal to be mined from the coalfields of Thar block-II in which Hubco has an 8% equity stake,” a press statement added.
“Financial close of the project is expected in June 2018,” it said.
Thar Energy CEO Saleemullah Memon said groundwork on the site had already commenced and the project was expected to begin commercial production by December 2020.
Hubco CEO Khalid Mansoor said Thar coal mines would be a game changer as they would indigenise energy resources for the country.
The project being set up by Thar Energy would be amongst the first in a series of power plants
based on Thar coal and would lead to substantial foreign-exchange savings.
FFC Chief Executive Shafqaat Ahmed said the project would help overcome power shortfall in the country by utilising domestic coal, which was also a major goal of the government, besides adding value to the company's long-term investments in the best interest of its shareholders.
They said the strategic partnership would open up new avenues of business growth whereas the excellent financial position, credibility and best business practices of the two corporate entities would provide synergy and confidence for all the stakeholders.