NEPRA Admits License Application Of Thar Energy Limited Under (TEL) CPEC

Karachi: National Electric Power Regulatory Authority (Nepra) has admitted the electricity generation license application of Thar Energy Limited (TEL) which is a subsidiary of Hubco, for its proposed thermal generation facility.

This project is being developed under the China Pakistan Economic Corridor (CPEC) and will be completed under the Power Policy for investment in Power Projects in Pakistan. The Hub Power Company, Hubco, is the largest independent power producer (IPP) and has intended to set up a 1×330 MW mine mouth Power Plant through the wholly owned subsidiary TEL.

The project of 1×330 MW mine mouth plant is based on indigenous coal which is to be mined from the coal fields of Thar Block II, which is a 95.5 square kilometer (kmz) area of coal field awarded to Sindh Engro Coal Mining Company (SECMC) for the exploration and mining of lignite primarily for power generation projects.

The feasibility report of the project stated that Mine Mouth Power Plant will be the most suitable option for utilizing of Thar Lignite. The TEL’s 1×330 MW power plant would be located within Block-II, which is one of the thirteen blocks identified and marked in Thar Coal Fields by SECMC, 500 kV transmission lines for power evacuation from Thar Block ll will be constructed by National Transmission and Dispatch Company (NTDC). These lines are planned to be connected to Matiari grid, 230 km away, from where the power will be transported to the load center of Pakistan in Punjab through HVDC transmission network.

The total project cost is as per the Coal Upfront Tariff 2014 is estimated at $497.7 million which includes the total equity worth of $124.4 million (25%) and the total debt is $373.3 million (75%). Majority of the debt would be raised from the Chinese financial institutions whereas some portion may be raised from local banks. The project is expected to be operational by July 2020.

Pakistan has lignite reserves of around 186 Bt. With these huge reserves Pakistan is at the 7th place amongst the lignite (coal) rich countries of the world. The biggest parts are located at Thar-parker District in south-eastern province of Sindh, where about 176 Bt of total lignite (95%) has been explored. The extension of the entire lignite bearing area is about 9100 sq. km. The Thar lignite is recognized as a major energy source, which has the potential to support the energy production from indigenous resource substantially.