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Groups join hands to set up Thar Coal-based Power Plant

Sindh Engro Coal Mining Company (SECMC) – a joint venture between Engro Powergen and government of Sindh – signed a Memorandum of Understanding (MoU) on Thursday with Pakistan’s leading business groups Atlas, Liberty and Sapphire to set up country’s first Thar Coal-based Power Plant with an investment of $800 million.

This will essentially pave the way for a much-needed shift of Pakistan’s current energy mix on most abundant indigenous alternate energy resource in Pakistan. This will attract new investments from various national and international entrepreneurs in this sector vowed the companies in their joint statement after the MoU signing ceremony.

This MoU and the project development are in line with the government of Pakistan’s vision of promoting indigenous fuel based projects to create a sustainable energy future of the country. The construction of the proposed two 300 megawatts (MW) power plants may achieve financial close in 2014 and is expected to start power generation in three years from the date of financial close.

This MoU will also encourage various international lenders to invest and provide financing for this mega project. Thar coal has the potential to change the energy landscape of Pakistan. Once scale is achieved, Thar coal can also be used for coal gasification for fertilizer and petrochemicals industry opening up new avenue for industries in Pakistan.

SECMC is a leaseholder of Thar Block II and plans to construct 3.5 million tonnes per annum coal mine. Thar coal is one of the biggest unexploited energy reserves with over 175 billion tonnes of coal, sufficient to cater to the country’s energy needs for next 100 years.

The companies believe that investment in Thar coal project today are a preliminary step towards building the capacity, which will foster a more developed and energy-efficient Pakistan.

The government is also keen to establish 10,000 MW of coal-based power plants over the next 10 years to produce cost efficient, affordable and reliable electricity, thus reduce the circular debt, and save significant forex by relying on indigenous energy resource.

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