The first-ever biggest financing of local banks in the history of Pakistan
Presidents of Habib Bank Limited (HBL) and National Bank of Pakistan (NBP) in a meeting with Chief Minister Punjab Muhammad Shahbaz Sharif presented an offer to countersign the project financing amounting to Rs84 billion to set up 1,200 megawatts LNG-based power plant at Bhikki Sheikhupura, which would be the first of its kind project and the biggest project financing portfolio arranged by local banks in the history of the country.
The planned financing by the banks is the single largest financing for an energy project raised domestically. Both the HBL and NBP expressed full confidence in the commercial and economic viability of the 1,200 megawatts LNG-based power plant at Bhikki Sheikhupura and called it an important initiative towards alleviation of energy crisis. The plant will be operated on imported LNG and is scheduled to start operation in 2017.
The Presidents of both the banks expressed confidence in the leadership of the Chief Minister Punjab and his team. They highlighted that completion of earlier projects in Punjab in record time has given a lot of confidence to the banks and the Punjab government enjoys high degree of credibility.
Both the Presidents resolved to work with other financial institutions to raise the financing in the shortest possible time to meet the stringent guidelines.
Sources told Pakistan and Gulf Economist (PAGE) that various projects in energy sector are underway in Punjab and serious efforts are being made for resolving energy problem. Power projects of 10,400MW are being set up in the whole country under Pak-China Economic Corridor and Investment agreements of $20 billion have been signed only in energy sector during the recent historic visit of the Chinese President to Pakistan.
Punjab government has already completed a 100 megawatt solar project, which is the first and the biggest project of its kind in the country, with its own resources. Work is in progress expeditiously on coal power plants in Sahiwal with the cooperation of China and the project will be completed in 2017.
According to the PML-N leader Hamza Shahbaz, the government is sparing no effort for overcoming energy crisis and several projects of power generation will be operational till the end of 2017. Work was in progress expeditiously on coal power plants in Sahiwal with the cooperation of China and the project would be completed in 2017. The government was also working on power generation projects based on renewable sources.
Hamza Shahbaz further said that work is continuing on a number of projects for overcoming shortage of electricity and after solar project in Bahawalpur and coal-based power projects in Sahiwal, federal and Punjab government will soon start working on the projects of 3,600 megawatt through LNG. He added that funds have also been allocated for the pending 950 megawatt Nelum Jhelum project. “We will eliminate loadshedding before 2018.”
He further said the Punjab government is taking speedy measures for resolving the energy crisis being faced by the country and special incentives are being offered to foreign investors for increasing investment in energy sector in the province.
He said the solar power station set up in the desert of Cholistan is a big hope for a brighter future of the country. A solar power project of 900MW is being set up with the co-operation of China and every effort is being made for its completion by the beginning of 2016. He said that besides traditional methods, government is also striving for generation of electricity from alternative sources and energy projects are being executed without wasting any time.
It may be noted that Punjab consumes about 67% of the total electricity generation in Pakistan. At present, there is a demand-supply gap of over 4,000MW, which is increasing at a rate of about 6-8% per annum. The significant gap between the demand and supply of energy, coupled with rapid population and GDP growth provides an ideal opportunity for private investment in the energy sector.
Sources claim that Punjab has over 500 million tons of coal deposits along with a readily available technical and skilled manpower. Punjab Mines and Minerals Department has identified sites and proposed configuration for power generation from Punjab coal with fifty (50) MW, hundred (100) MW and two hundred (200) MW power plants. Punjab has over 317 low hydropower sites mostly under 50 MW with a cumulative generation potential of over 600 MW on canals and barrages. Others big size hydropower projects are also available. Punjab lies in an area of one of the highest solar radiation (insolation) in the world. The average daily radiation (insolation) amounts to 5-7kWh/m2/day and with the sun shining a good 6-8 hours daily, 18-25 MJ/M2 of daily energy is available. Wind is another great avenue for meeting Punjab’s energy needs.
Kalar Kahar corridor, which is around 10-20km wide and 250km long, has been identified as wind corridor by National Renewable Energy Laboratory of the US Department of Energy with a wind power density at 50 m of over 800 W/m-sq.
Under the Punjab Power Generation Policy, investors are invited to participate in the development of power generation projects of any type of technology. Punjab Power Development Company Limited (PPDCL), which is corporate entity owned by the government of Punjab needs to facilitate investors interested in power projects.