Oracle Coalfields PLC has signed an exclusive Memorandum of Understanding (MoU) with Chinese company SEPCO Electric Power Construction Corporation for the development of a 600 MW coal-fired power plant in Pakistan.
The MoU marks another step in Oracle’s progress towards delivering the commercial potential of Block VI in the Thar Coalfields, in the south-eastern desert of Sindh Province, Pakistan. The agreement is for an initial period of six months, during which a technical feasibility study and an environmental impact study will be prepared, relating to the development of a coal-fired power plant.
Key aspects of the MoU:
- Plans to develop a 600 MW coal-fired power plant, including its design, construction and operation;
- Plans to finance up to 70% of the debt for the plant, and provide significant equity funding for majority shareholding in the newly incorporated power company. The company will be registered in Pakistan, and Oracle will hold a minority stake;
- Plans for SEPCO to provide equity funding in Oracle’s coal mining subsidiary, Sindh Carbon Energy Limited (SCEL), to secure a significant minority shareholding.
SCEL owns the mining lease for Block VI in Thar Coalfield, where the company mines lignite coal. Oracle plans to develop a mine and to sell coal to an integrated power station at the mine.
Under the terms of the MoU, SEPCO will develop plans for two 300 MW integrated power stations at the site, that would require approximately 5 million tpa of lignite coal from Block VI.
Shahrukh Khan, CEO of Oracle, commented: "Oracle has been successful in securing the participation and support of these impressive partners because we believe we have the makings of a very impressive project. Emerging economies depend on the stable supply of cost effective power to fuel their industrial growth and economic development. Once developed, Oracle's project at the Thar Coalfield in the Sindh Province will be uniquely placed to be a major supplier of power to Pakistan for the next 20 years and beyond.
"Oracle is pleased to be partnering with SEPCO, a major industrial group that shares our belief in the potential for the Thar Coalfield to supply the future power needs of Pakistan. We look forward to working with SEPCO on the development of a sizeable power generation project where they will bring not only their technical construction experience but also provide the project with access to equity and debt funding."
Liu Chuanming, MD of SEPCO, added: "SEPCO is pleased to partner with Oracle in the development of Block VI Thar Coalfield Project by providing technical construction service, financing and equity participation in the development of the Project. We expect the power supply will benefit industrial power consumers and accelerate the economic growth in Pakistan. We look forward to working with Oracle on the successful development of coal mining and power generation projects in Thar".
Adapted from press release by Katie Woodward
Read the article online at: https://www.worldcoal.com/power/21112013/pakistan_coal_power_potential_283/