KARACHI: Pakistan’s premier regasified liquefied natural gas-based power projects, envisaging 2,400-megawatt of electricity, took another step towards the financial close after the government granted them tariffs, The News learnt on Monday.
The National Electric Power Regulatory Authority (Nepra) granted tariffs for the two regasified liquefied natural gas (RLNG)-combusted plants, being set up by the National Power Parks Management Company, a private limited company wholly owned by the government in Haveli Bahadur Shah of district Jhang and Balloki of Kasur.
The proposed facilities are thermal independent power producers, using RLNG as the primary fuel and high-speed diesel (HSD) as back-up fuel.
Nepra granted RLNG tariff at Rs6.4284/kilowatt hour (kWh) for 1,223MW plant of Balloki and Rs6.4202/kWh for 1,230.5 MW plant of Haveli Bahadur Shah. The approved tariff for HSD-based generation is Rs10.0928/kWh for the former and Rs10.0829/kWh for the latter.
The combined-cycle power plants are being set up on build, own and operate basis with an estimated cumulative cost of $1.778 billion.
The gas supply agreement with Sui Northern Gas Pipelines Limited for the continuous supply of RLNG to the site of the power plants has been signed. Its base load operation is at an advance stage and the commercial production is scheduled for January 2018.
Previously, the Economic Coordination Committee of the cabinet approved payment and fuel supply mechanism for RLNG-based public sector power projects.
The decision was aimed at facilitating setting up of 3,600MW plants in the public sector and switching about 900MW of private power projects to RLNG from domestic natural gas. Three RLNG-based projects, including two mentioned above, and one in Bhikki of Sheikhupura district, will be set up in the public sector and then privatised.
Bhikki’s RLNG-based power plant of 1,156MW was already granted tariff in April. The two projects are yet to achieve financial close. However, the grant of tariff is another step towards the financial close.
In accordance with the approvals of Cabinet Committee on Energy and Executive Committee of National Economic Council, funds have currently been provided under the cash development loan. A decision has been taken to finance the cost of the projects on a debt to equity ratio of 70:30 with loan provided at 3-month Karachi Interbank Offered Rate plus 3.0 percent floating mark-up rate.
The financing arrangement is in line with the government’s objective to sell the projects in due course to the private sector, which requires the projects to be commercially attractive and financially viable.
