Fauji Power Company to start contributing in the earnings of Fauji Fertilizer Bin Qasim from the next quarter as the plant has been in full swing selling around 118 MW.
FFBL Power Company Limited (FPCL) is a subsidiary of Fauji Fertilizer Bin Qasim Group (FFBL), which in turn is owned by Fauji Group. Fauji Group is one of the largest groups in Pakistan’s business landscape with products ranging from cereals to meat.
FFBL last year announced that the company plans to move towards energy self-sufficiency and is planning to build a coal-based power plant at Bin Qasim. After approval from all stakeholders, Directors of FFBL resolved and approved the transfer/sale of the leasehold rights of FFBL in 100 Acres of Land situated at Bin Qasim to FFBL Power Company Ltd. at fair market value. The said land was to be assigned to the company to build a 118 MW Coal fueled power plant to fulfill energy (steam and electricity) needs of FFBL plant situated at Bin Qasim and sell additional production to K-Electric Karachi.
Talking to Mr. Saud, he said that Fauji Fertilizer bin Qasim and Fauji Foundation jointly hold the company with 75% and 25% share respectively.
FPCL plant was inaugurated on 6th of February, 2017 and started its commercial operations from 19th of May, 2017 which came a slight delay from the stipulated date in end of April announced by the company in November, 2016.
FPCL informed stakeholders that due to testing of K-Electric system with FPCL grid, the company changed its date for commercial operations from late April to 15th of May. Subsequently, Grid Synchronization was achieved with K-Electric and FFBL on May 16th 2017. After successful synchronization, FFBL via an exchange notice announced that FPCL has commenced commercial operations on 19th of May, 2017.
The plant at its total capacity will produce 118 MW of electricity, out of which 52 MW will be supplied to K-Electric whereas 48 MW will be used up at the FFBL Fertilizer Plant. Furthermore, FPCL also supplies 200 tons worth of steam to FFBL for their fertilizer plant operations.
According to company officials, FPCL has entered into a 30 year long-term agreement with K-Electric. It is currently supplying electricity to K-Electric at a baseline rate of 9.46 Rupees.
According to Mr. Shahid Saud – Manager Finance at FCPL – the coal used for the operations is being imported from South Africa. FPCL boasts of coal storage capabilities of 80 – 90,000 tons at their bin Qasim plant. The projects estimated cost was around 285 million USD (PKR 30.03 billion). The said investments translate amounts worth 35 billion PKR into FFBL Balance Sheet.
Expected Return on Equity of the investment is 17 – 18% with an expected DPS contribution of 1.7 rupees per share into the consolidated earnings of FFBL Group.
Officials informed that company will move towards capacity enhancement in future subject to approval from all relevant stakeholders.
