1320MW Thar coal-fired power project achieves financial close

The country’s largest 1320MW Thar coal-fired power project, a China-Pakistan Economic Corridor (CPEC) portfolio project, has achieved Financial Close, following China Export and Credit Insurance Corporation — Sinosure has agreed for the  much awaited insurance coverage .
Private Power and Infrastructure Board (PPIB) has announced the financial closing of country’s largest Thar coal-fired power project worth $2 billion by M/s Shanghai Electric Corporation, China. The project was completed in February 2023, however, the financial close of the project was not achieved as Sinosure was reluctant to provide insurance coverage to the project and was seeking approval from the Chinese government in this regard. Finally the project has received nod from the Sinosure for the coverage and it has achieved its financial closure. China Export & Credit Insurance Corporation Sinosure is a state-funded and policy-oriented insurance company established and supported by the state to promote China’s foreign economic and trade development and cooperation.
The signing ceremony was held here Wednesday which was attended 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 on the occasion.
Having the generation capacity of 1320 MW, Shanghai project has been implemented under the China-Pakistan Economic Corridor (CPEC). It is commendable that in order to meet stringent timelines agreed by the Government of Pakistan and 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 project on 5th February 2023.
Shanghai Electric Group Corporation are the sponsors of the 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 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 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. Rs. 4.98/kWh). By its operation, the GoP saves precious foreign exchange of around US 500 million dollars annually. Further, this project significantly contributed in reducing the overall basket price of electricity which may be translated to around Rs. 200 billion annually while expected to generate 9 billion units of electricity per year.
With the induction of Shanghai, the total installed capacity of five commissioned Thar coal based power projects has reached to 3300 MW which is an evidence of PPIB’s commitment towards promoting indigenous fuel based power generation. While expressing his views, Shah Jahan Mirza lauded the important role of CPEC for development of Pakistan’s power sector and reiterated his resolve for timely completion of other ongoing hydro, wind and solar projects under the CPEC arrangement.