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Oracle Power brings in Chinese for Pakistani project
PAKISTAN
PAKISTAN-FOCUSED IPP Oracle Power has brought in China National Coal Group and Dubai’s Sheikh Ahmed Dalmook Al Maktoum Private Office to develop a 1,320-MW coal-to- power project in Pakistan’s Thar Block VI.
Oracle said that China National Coal Group would take a 73% stake in a new special purpose vehicle (SPV), while the private office of Sheikh Ahmed will hold 15% and Oracle Power 12%.
The project will be funded on a 75% debt and 25% equity basis.
The creation of the SPV makes the project compliant with Pakistan’s 2010 Independent Power Production policy guidelines.
As well as a power plant, the project could produce fertiliser, following a proposed new ini- tiative between the governments of Pakistan and China with respect to gasification of coal into fertiliser.
This new initiative runs in parallel to Oracle’s remaining long-term plan to construct and oper- ate a mine-mouth power plant on Thar Block VI, located in Sindh Province.
The AIM-listed company said the consor- tium agreement outlined the partners’ proposed equity commitments, and would allow Oracle to obtain a letter of intent (LoI) for power produc- tion from the Pakistani government.
Oracle and its partners must also apply for a new Upfront Tariff from the National Elec- tric Power Regulatory Authority and then seal
a power purchasing agreement (PPA) with the Central Power Purchasing Authority in order to reach financial close.
“I am delighted to confirm the formal sign- ing of this consortium agreement following two monthsofextensiveworkfromalloftheparties,” said Oracle chief executive Naheed Memon.
He added that as well as two 660-MW coal units, there was potential for coal to gas and liq- uids, and coal production for trade.
Oracle aims to take advantage of Pakistan’s growing needs for power, gas and liquids from coal.
Oracle said in its June 2019 that the Pakistani new government led by Imran Khan supported both the Thar coal project and the country’s good relations with China.
Oracle Power aims to use up to 8mn tonnes per year (tpy) of coal mined at Thar to fire the two mine-mouth 660-MW units.
Oracle’s Thar project forms part of the China Pakistan Economic Corridor (CPEC) and has Priority status, meaning that China takes the project seriously and is keen to use it to expand its economic and industrial footprint in Asia.
The Thar Coalfield is located 380 km east of Karachi. It covers an area of 9,100 square km, with a total lignite resource in excess of 175bn tonnes, the sixth largest in the world.
Around 30% of Pakistan’s 207mn people do not have access to electricity.
Photo: Getty Images
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w w w. N E W S B A S E . c o m Week 08 26•February•2020
