LAHORE - The physical work on Thar Coal Power Project will be started within next two months even before financial close while power generation is expected to start in 2017, earlier than any other project currently being envisaged.

This was claimed by Sindh Engro Coal Mining Company (SECMC) CEO Shamsuddin A Shaikh while presiding over a meeting of the company.

Speaking of the project timelines, Shaikh said that project in now in the phase of contractor finalization. World class Chinese companies have given proposal for execution as well as financing both debt and equity. Contractor finalization is expected within next 30 days and SECMC is now working on the financing of the project. Here again, top Chinese banks have expressed their interest in the financing the project. The financial closure is expected by mid-next year and the project will start its commercial operations within three and half years of the financial closure.

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In his remarks, Shamsuddin Shaikh appealed for joint efforts by Sindh and federal governments to make the project happen. He requested the federal government to list Thar Coal Project among the “Priority Projects for Pakistan” as this is not included in the list of priority projects despite the fact that Pakistan’s power sector suffers from shortage as well as expensive energy mix.

Shaikh also mentioned that lenders have linked their firm commitment with provision of requisite infrastructure among which transmission line from Thar to Matiari is a key requirement. While NTDC’s future projects do include construction of this transmission line, federal government needs to start working with potential lenders of transmission line i.e. ADB and JICA which are committed to this project.

Shaikh also requested that to fast track the power project quick resolution of bureaucratic formalities is essential e.g., addition of Thar based power projects power policy 2002. He also underlined the importance of notifying upfront tariff based on Thar coal for which SECMC is willing to provide much needed assistance to NEPRA. This will also help fast track Thar coal based mining and power project.  Shaikh also emphasized that GoP needs to keep Thar coal in perspective during finalization of policy for conversion projects through offering higher guaranteed returns for conversion project based on local versus imported coal. Similarly GoP should also stipulate blending of imported coal with local coal for the new power plants which will go a long way in realizing optimal scale of Thar coal mine. Same has been done for the ADB funded project at Jamshoro.

Shaikh requested that even though mining is a provincial subject, Thar coal project should be taken as a national project as its success will ensure energy security for entire country for which both federal and provincial governments need to show the spirit of cooperation.

Globally, the percentage of energy production through coal out of the total energy mix is approximately 46%; however, for Pakistan, this stands at a massive low of 0.1%. Most of the countries where coal is extensively used depend on their own coal reserves versus importing the same. Import of coal is very risky as its prices cannot be predicted coupled with our currency devaluation which would again take us back to the current unsustainable position.