KARACHI: The National Electric Power Regulatory Authority (Nepra) has admitted the application of Nishat Energy Limited (NEL) for consideration of the grant of generation license for its 660 (megawatt) MW proposed thermal generation facility.
NEL to act as a special purpose vehicle and develop a 1x660 MW coal fired power plant at Liaqatpur Tehsil in Rahim Yar Khan.
The project is intended to be financed from the Chinese banks under the China-Pakistan Economic Corridor (CPEC) government to government agreed framework as provided in the CPEC agreement wherein project Rahim Yar Khan is listed at no 12 in the designated projects list.
TBEA Xinjiang SunOasis Company Limited as a co- sponsor would provide technical and project financing proficiencies. TBEA is an upcoming thermal power project developer in China with a proven track record of developing, financing, constructing, and operating coal fired projects in China.
According to a letter of intent (LoI), the project company was diligently working towards the early implementation of the project, on a build own and operate (BOO) basis.
The construction of 660 MW power plants on super-critical technology would take approximately forty-eight months or less from the issuance of notice to proceed to the EPC contractor. The plant commissioning was expected in the fourth quarter of 2020. TBEA, as per the consortium agreement, has taken a lead role in procuring Chinese financing which would also ease the burden on Nishat from seeking project financing from local banking channel with visible foreign exchange liquidity constraints imposed by the State Bank of Pakistan (SBP).
The electricity generated from this project would be supplied to the grid system of National Transmission & Despatch Company (NTDC) Limited through a 500KV grid available in the vicinity of this project. The power generated by the project would be sold for the term of 30 years.
The proposed project site was located in Cholistan Development Authority's jurisdiction, Tehsil Liaquat Pur District Rahim Yar Khan. The entire Site land is owned by the Government without any private lease or encumbrance or occupation. The Company has already been issued a recommendation letter by the energy department by the Government of Punjab to the board of revenue Punjab for the allocation of land for the subject power project.
The target debt equity ratio is 80:20. While a LoI appended as Annex-G was also procured by a potential Chinese equity partner in favor of the project expressing willingness to finance the project subject to customary lenders' due diligence.
The sponsors intends to procure 100 percent of project debt from Chinese banks with support from a reputable Chinese equity partner as an overseas investment loan or an ECA tied financing package or any other financing program which the sponsors deem fit.
In this regard, the Nepra has invited all stakeholders, to submit their comments in favor / or against the grant of generation license to NEL.