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Shanghai Electric achieves financial close for Thar coal-fired power project

Shanghai Electric achieves financial close for Thar coal-fired power project
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December 14, 2023 (MLN): In a recent development for Pakistan’s power sector, the Private Power and Infrastructure Board (PPIB) has announced the successful financial closing for the country’s largest Thar coal-fired power project by Shanghai Electric Corporation, China, according to a press release issued on Wednesday.

The signing ceremony was held in the office of PPIB which was graced by Shah Jahan Mirza, Managing Director, PPIB, Meng Donghai, Chief Executive of the Project Company i.e. Thar Coal Block-1 Power Generation Company, and Zhou Bo, Chief Executive Officer of Industrial and Commercial Bank of China (ICBC), Karachi Branch.

Other high-level officials of PPIB and Project Company/Sponsors were also present.

Having a generation capacity of 1,320 MW, the Shanghai project has been implemented under the China-Pakistan Economic Corridor (CPEC).

In order to meet stringent timelines agreed by the Government of Pakistan and the Government of China, the Project Company commenced construction work in a crunch situation of COVID-19 by leveraging its equity and bridge financing and completed the project on February 05, 2023.

Shanghai Electric Group Corporation is the sponsor of this $2 billion project, while Sino Sindh Resources Limited (SSRL) is the coal supplier from Thar Block-1.

Whereas Industrial and Commercial Bank of China (ICBC), China Development Bank, Bank of Communications Co. Ltd., China Minsheng Bank Corporation, Postal Savings Bank of China Co., Ltd., and Agriculture Bank of China are the lenders of the Project while Sinosure is the insurer of the project.

The plant is based on state-of-the-art Super Critical Technology and is equipped with the latest equipment to fulfill environmental obligations and fully compliant with the World Bank/IFC and Pakistan EPA standards.

This project is the second cheapest power project from the fuel cost point of view (i.e. Rs4.98/kWh). By its operation, the government saves precious foreign exchange of around $500 million annually.

Further, this project significantly contributed to reducing the overall basket price of electricity which may be translated to around Rs200 billion annually while expected to generate 9bn units of electricity per year.

With the induction of Shanghai, the total installed capacity of five commissioned Thar coal-based power projects has reached 3,300 MW which is evidence of PPIB's commitment to promoting indigenous fuel-based power generation.

While expressing his views, Shah Jahan Mirza lauded the important role of CPEC in the development of Pakistan’s power sector and reiterated his resolve for the timely completion of other ongoing hydro, wind and solar projects under the CPEC arrangement.

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Posted on: 2023-12-14T11:09:56+05:00