Current political turmoil in the country has marred government's plans to establish ten coal fired power plants of 6600 MW capacity (660 MW each) as the response from investors is negligible, well informed sources told Business Recorder. Private Power Infrastructure Board (PPIB) had sought Expressions of Interest from the potential international and national investors till August 18.
"Investor response is very poor because of current political crisis. We are extending the date for submission of EoIs," said sources. According to Private Power Infrastructure Board (PPIB), Government of Pakistan's coal-based power generation initiative aims at an enhancing electricity generation capacity at an affordable cost. International and local private parties were invited to set up state of the art super critical power plants based on imported coal in Pakistan Power Park located in Gadani (Balochistan) with a cumulative capacity of 6600 MW on fast track basis.
The government offered the following: (i) concessions and incentives under the policy of power generation projects 2002 will be available to the power sector; (ii) infrastructure and services to be provided by Pakistan Power Park Management Company (PPPMCL). Power evacuation from Pakistan Power Park to be provided by National Transmission and Despatch Company Limited (NTDCL) or private transmission companies; and (iii) a one-window facility will be provided by the PPIB.
A couple of months ago, a Memorandum of Understanding (MOU) was signed between China Machinery Engineering Corporation (CMEC) and PPIB for setting up two coal-based power plants of 660 MW each at Gaddani at an estimated cost of $2 billion. A high-powered inter-ministerial delegation recently visited China to finalise understanding on thermal and hydropower projects and signed an agreement of 10,400 MW.
Recently, stakeholders, including Chairman Central Development Working Party (CDWP) headed by Minister for Planning, Development and Reforms Ahsan Iqbal, have pointed out serious violations in Gadani Power Park designed to establish 10 imported coal-fired plants of 660 MW each (10x660 MW). PPPMCL has been established as a special purpose vehicle for dealing with the ten imported coal-fired projects. The PPPMCL will also be responsible for operation and maintenance after completion of project. The cost of the project has been estimated at Rs 146.627 billion ($1.488.6 billion) with a 15 percent GoP equity and an 85 percent debt financing as foreign loan.
The GoP's equity will be $223 million whereas debt is estimated to be $1.265.3 billion. Interest rate on foreign loan will be Libor+400 basis points/@ Eurbor +400 basis points and on local loan Kibor+ 300 basis points. Average interest rate will be 6 per cent and repayment period 12 years. Weighted cost of capital is estimated to be 6 percent. Later on, Executive Committee of the National Economic Council (ECNEC) headed by the Finance Minister, Ishaq Dar also endorsed the viewpoint of CDWP and directed the Ministry of Water and Power to review the feasibility study in the light of observations made in the CDWP meeting.
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