Sindh govt to provide infrastructure for $600m Thar mining project
KARACHI: The Sindh government has inked accords with Sindh Engro Coal Mining Company (SECMC) and water utilisation agreement with Engro Powergen Thar Limited (EPTL) for mining and associated power plant activities in Thar Coal Block II.
Under the accord, the Sindh government would commit to provide all required infrastructure to facilitate the mining project amounting to $600 million.
Both agreements mark the start of an era, which would usher in energy security and economic prosperity for Pakistan as both mining and power projects move closer to financial close, which is expected by the end of the year.
These agreements would allay concerns of the Chinese investors, with whom both companies have been in negotiations for securing financing for the mining and power projects. The project would prove to be a game changer, providing a sustainable energy landscape for Pakistan by utilising its indigenous energy resources whilst also bringing prosperity to the local people of Thar. The joint venture agreement, under which SECMC was formed, provides the government with majority shareholding in the company (51%) and responsibility for the provision of key infrastructure such as road networks, airport facilities, water supply scheme, effluent disposal scheme as well as all required security for expatriate employees who are expected to arrive in the area early next year.
The continuous support in expediting timely execution of Thar Coal Project and furthers its resolve to encourage economic prosperity in the country by facilitating the requirements of investors for the financial close of SECMC’s mining project shows the government’s commitment. The power plant of EPTL is nearer to achieving financial close with the signing of water utilisation agreement with the government. Under this tripartite agreement, Thar Power Company, a subsidiary of SECMC, would be responsible to operate and maintain the infrastructure facilitation while the Sindh government (Irrigation Department and Energy Department) would ensure the allocation of 17.5 cusecs of treated water for the functioning of EPTL’s power project in Block 2.
Under the agreement, concerned government departments would be responsible to construct water supply infrastructure from the Left Bank Outfall Drainage to Nabisar, whereas EPTL would be responsible to establish the same after Vajihar. The agreement is a pivotal step for achieving financial closure for EPTL’s power project as it secures the water source for the functioning of the power plant.