HUBCO says CPHGC’s 2x660MW power plant declared ‘project complete’

KARACHI: China Power Hub Generation Company (Private) Limited’s (CPHGC) 1,320 megawatts (MW) coal-fired power plant in Balochistan has achieved project completion date (PCD), the company said on Thursday.

The imported coal-fired plant was declared “Project Complete” by CPHGC’s lenders, according to Hub Power Company (HUBCO) that shared the development at the Pakistan Stock Exchange (PSX).

CPHGC was formed in September, 2015 by HUBCO and its Chinese partner, China Power International Holdings Limited to develop, construct, and operate a 2x660MW coal fired power plant at the Hub Plant Site in Balochistan.

“We are pleased to inform you that China Power Hub Generation Company (Private) Limited’s (CPHGC) 2×660 MW power plant has been declared “Project Complete” by CPHGC’s lenders on 23rd February 2023 (Project Completion Date or PCD),” the notice read.

The project successfully achieved its commercial operations date effective August, 2019. HUBCO, through its wholly owned subsidiary, Hub Power Holdings Limited owns 47.5 percent of the shares of CPHGC.

The project is recognised as one of the priority projects under the China Pakistan Economic Corridor (CPEC).

“The declaration of PCD is a monumental occasion for HUBCO as it releases the company from its obligation to maintain a $150 million standby letter of credit. This will also enable CPHGC to pay dividend to its shareholders subject to availability of distributable profits,” the stock notice added.

The two units of 660MW each achieved synchronisation with the national grid on December 28, 2018, and May 28, 2019, respectively while the integrated coal jetty became operational in December 2018 with the arrival of the first shipment of coal, as per the information given on the HUBCO website.

The company issued right shares and raised an amount of Rs7 billion from PSX. The right share was priced at Rs50 per share and the company has issued 140 million shares. The purpose of rights issuance was to raise funds, which were utilised to consolidate HUBCO’s energy portfolio and increase its shareholding in CPHGC from 26 percent to 47.5 percent.

In November, 2022, CPHGC served a notice to HUBCO for encashment of a standby letter of credit (SBLC) worth $150 million, for which the Pakistani government requested the Chinese embassy to arrange a meeting of the Joint Working Group, a forum set up under the CPEC, to resolve the conflict, according to reports. The SBLC was later extended on mutually agreed terms.