KARACHI

Sindh Engro Coal Mining Company (SECMC) and Engro Powergen Thar Limited (EPTL) signed local and foreign financing agreements on Monday.

Negotiations to secure the loan financing for the Thar coal project in Thar Coal Block II have been ongoing since term sheets for the same were signed during Chinese President Xi Jinping’s visit to Pakistan earlier this year. Under the finance agreements signed, a syndicate of local banks including conventional and Islamic financing institutes will be providing Rs 52 billion for the mining project being undertaken by Sindh Engro Coal Mining Company and Rs22 billion for associate power plant being established by Engro Powergen Thar Limited. The syndicate is led by Habib Bank Limited (HBL), United Bank Limited (UBL), Bank Alfalah Limited (BAFL), and Faysal Bank Limited (FBL). The Foreign syndicate consists of Chinese banks namely, China Development Bank (CDB), Construction Bank of China (CBC) and Industrial & Commercial Bank of China (ICBC) are providing loans amounting to USD 820 million.

The drafts of the aforementioned agreements were approved by the Ministry of Finance earlier this year and the government of Pakistan has provided sovereign guarantee of USD700 million to underwrite the loan taken by SECMC fully backed by government of Sindh (GoS). The project’s addition to the China Pak Economic Corridor (CPEC) as ‘priority’ earlier this year paved the way for its financing to be completed in a timely fashion.

In addition, sponsor support agreements for both projects were also signed, whereby the sponsors, namely, government of Sindh, Engro Powergen Limited, Thal Limited, Hub Power Company, Habib Bank Limited, and China Machinery Engineering Corporation agreed to inject USD 490 million into the project to ensure that the companies have the funds available for the smooth execution of the project. The project is expected to be commissioned by 2018. In phase 2 of the project, the mine will be expanded to a capacity of 7.6 mtpa and another 660 MW power plant facility will be added, this expansion has also been included into the CPEC.

Earlier this month, the GoS signed an Implementation Agreement with SECMC and Water Utilization Agreement with Engro Power gen Thar Limited. Under the Implementation Agreement with SECMC, the Government committed to provide the required infrastructure to facilitate the mining Project amounting to USD 600 million (PKR 60 billion). Nine companies given LoIs to generate biomass electricity

APP from Islamabad: As many as nine companies and sugar mills have been issued letter of intents (LoIs) to generate about 271MW biomass based electricity in different areas of the country, Chief Executive Officer, Alternate Energy Development Board (AEDB), Amjad Ali Awan said.

"In order to tap the potential of electricity generation from the sugar mills in Pakistan, the government on recommendation of AEDB has already announced the Framework for Power Co-Generation (Baggase/Biomass)," Awan said in an interview with APP.

Giving details of these biogas projects, he said these included Etihad Power Generation (Ltd) with capacity of 67 megawatts, Layyah Sugar Mills with capacity of 41 megawatts and Almoiz Industries with capacity of 36 megawatts.

Awan said that other mills that have been issued LoIs to generate biogass electricity included Hamza Sugar Mills (15 MW), Alliance Sugar Mills (19 MW), Safina Sugar Mills (20MW), Shahtaj Sugar Mills (15MW), Chanar Energy (22MW), and RYK Energy (36MW).

Awan said AEDB has been following standard security documents (Energy Purchase Agreement (EPA)/Implementation Agreement (IA) for bagasse based co-generation projects under Framework for Power Co-Generation 2013 (Baggase/Biomass).

He said that NEPRA has also announced an upfront tariff of Rs. 10.7291 per kWh (Levellized) for bagasse based co-generation projects under the Framework.