KARACHI: A Memorandum of Understanding (MoU) was signed between Sindh Engro Coal Mining Company Limited (SECMC), China Power International Holding Limited (CPIH), and Sino Sindh Resources (Pvt) Limited (SSR) to develop 6,000 MW of Thar coal based power plants in Sindh.
A statement issued here on Thursday said that the CPIH is a wholly-owned core enterprise of China Power Investment Corporation, one of five State Power Corporations in the People's Republic of China.
It said that the principal business of CPIH is to develop, construct, own, operate and manage large power plants. Currently, the company is managing power plants with a generation capacity of more than 23,000 MW. SSR and SECMC are the developers of Thar Coal Mining Blocks-I and Block-II, respectively.
According to the MoU, the parties have reached an intention of jointly developing, within the next 10 years, coal-fired power projects with a total installed net capacity of 6,000 MWs in Sindh which will be expected to use lignite coal mined from Block 1 and Block 2 in the Thar Coalfields.
The CPIH will be the majority shareholder and will be responsible for implementation and execution of the power projects subject to the signing of the formal agreement and the approval of Pakistan Government.
The power projects will be developed in five phases of 1,200 MWs each with a configuration of 2 x 600 MW.
The coal mining will be independently developed by SSR and SECMC for Block 1 and Block 2, respectively, who will supply coal based on the coal demand created by the power projects developed by CPIH.
The statement pointed out that Thar coalfields contain the world's 7th largest coal reserves - estimated at 175 billion tons, capable to produce 100,000 MW for the next 200 years.
Thar lignite is indigenous, abundantly available, and ideally suited to produce electricity giving it distinct advantage over imported coal, the statement said adding that the price of Thar Coal is set on a `cost plus' basis and is not linked to international energy price movements, thereby, insulating the end consumer of electricity in Pakistan from the vagaries of international coal price movements.
Thar coal also has the advantage of economies of scale, which will result in a progressively lower coal price and predictable electricity price as the mining operation scales up and more power plants are added.
Utilization of Thar coal for power generation will result in huge foreign exchange savings versus any other imported energy resource.
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