The Pakistan government has finally given a sovereign guarantee to the $2-billion Thar coal mine and power generation project, opening the way for its much-awaited financial close, a top official said on Tuesday. “We received the sovereign guarantee on Monday,” said Sindh Engro Coal Mining Company (SECMC) CEO Shamsuddin Shaikh. “Now we expect to achieve the financial close within this year.” After years of hollow promises, a landmark agreement was signed in August to finance Pakistan’s first open-pit coal mine in the ‘natural resource-rich’ Tharparkar district, which boasts holding 180 billion tons of coal but could not be exploited due to various reasons since its discovery in the early 1990s. A consortium of local banks including HBL, UBL and Bank Alfalah have already agreed to lend $500 million (Rs50 billion) – one of the largest project financing deals in recent years – to SECMC, which is a joint-venture (JV) between the Sindh government and five private companies. The project includes a mine with a capacity to produce 3.8 million tons of coal a year and a 660MW coal-based power plant. We are inclined to believe that this development is a positive one, coming as it does a couple of days after the Sindh chief minister had criticised the federal government for delaying the sovereign guarantee. There is no doubt that the project has been delayed for an inexcusably long period of time and all stakeholders must now display urgency to complete what should have started years ago. With the project’s financing complete, backed by the state’s guarantee, there is little left in the way of Thar contributing to the country’s energy resources. We sincerely hope that vested interests stay at bay with this one. Sindh is not exactly known for its development projects, much less its work on the energy front, but it has the potential to achieve a lot in this sector. The use of wind and solar energy are also areas that could define the province’s future energy landscape. However, for any progress in this crucial area, the Sindh government must now prove that it is not as inefficient as most people perceive it to be. The Thar coal project can be the launching pad for further development work in a highly deprived and backward area. The rural areas of Sindh, and specifically Tharparkar, have been neglected for long and, compared to rural Punjab, have seen little development work.
pk.shafaqna.com
