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China endorse lending of $1.2b for Thar coal project

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ISLAMABAD: china State Council (CSC) has endorsed financial aid for the scheme of coalmining-cum-power project in Thar – the mega project which has assumed an essential position in Pakistan’s struggle to deal with electricity shortage.

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The endorsement from the council would let Chinese banks to release $1.2 billion for the project to tap massive coal reserves in Tharparkar district of Sindh province. The final document for this lending is likely to be inked in Beijing in December 21.

The project includes development of a coalmine with a capability to generate 3.8 million tons per annum and a 660MW power plant, will cost approximately $2billion and is expected to be completed by 2018.

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For the agreement, a consortium among banks were signed and the local banks – HBL, UBL and Bank Alfalah – have already agreed to lend $500 million to SECMC, which is a joint venture between the Sindh government and five private organisations.

As a part of the CPEC, foreign currency loan for the project is being provided under a consortium of major Chinese banks, led by the China Development Bank, while other banks in the association are Industrial and Commercial Bank of China (ICBC).

Meanwhile, it were Engro Corporation and the Sindh government, which jointly initiated the project; however, Engro’s sponsor, Dawood Group grew to woo other private parties as stakeholders later on.

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