Thar Block II power station

From Global Energy Monitor

Thar Block II power station, also known as Thar Engro, is a 660-megawatt (MW) coal plant in Pakistan.

Location

The map below shows the location of the plant, near Thar Block II coal mine, in Thatta district, Sindh province.

Loading map...

Background: Phase I (Thar Engro)

Blocks in Thar coal field. Photo: Oracle Coalfields

In October 2009, the Sindh government set up a joint venture company — the Sindh Engro Mining Company — on a 40:60 ratio for exploration in Block II of the Thar area, done through international competitive bidding. The company planned to develop an open pit mine of 6.5 million tonnes per annum capacity initially which would be scaled up to 22.5 million tonnes per annum subsequently. Power generation would be carried out by Engro Power Gen. Initially, 1,200 megawatts would be generated and it would be raised to 4,000 MW. The first megawatt of electricity from Thar into the national grid was planned for 2015-2016. A licence had also been granted for an experimental project on coal gasification.[1]

The Sindh government in Pakistan signed a $30 million agreement with the World Bank for the Thar Coal and Power Technical Assistance Project (TCAP). However, in May 2010, Pakistani news outlets reported that the World Bank had withdrawn from the project. One anonymous government official stated that "major reasons for the World Bank's withdrawal from the project is lack of emphasis on Thar coal resources in our national energy policy and our failure to highlight these reserves as critical for our national security." One issue reportedly of concern to the World Bank was the resettlement of local people.[2]

In 2011, Sindh Engro Coal Mining Company’s Chief Executive Officer Khalid Mansoor warned that delay in provision of infrastructure like water and transmission lines might jeopardise the $3.4 billion coal project at Thar. The joint venture between the Sindh government and Engro was scheduled to produce 1,200-MW in the first phase by 2015-16 and 4,000-MW in the second phase by 2020. In a presentation on Thar coal to Prime Minister Syed Yousuf Raza Gilani in Karachi, Mr Mansoor said that lack of grant payment of Rs10 billion by the federal government had created financial difficulties for smooth running of the project. Thar Coal Energy Board Managing Director Ajaz Ali Khan endorsed the views of Mr Mansoor and said that the vital infrastructure projects for Thar coal development were needed by 2015, at an estimated cost of Rs148 billion. Khan requested the prime minister organise an international conference to attract foreign direct investment in Thar coal projects, including donors such as the World Bank, the International Finance Corporation, and investors from China, USA, UK, Japan and the Middle East.[3]

On May 14, 2011, Pakistan's Federal Finance Minister Abdul Hafeez Shaikh assured the Thar Coal Energy Board (TCEB) that the federal government would provide "all possible assistance and funding" for infrastructure development for the Thar coalfields. He gave this assurance at a meeting of the TCEB chaired by Sindh Chief Minister Syed Qaim Ali Shah, which gave an update on infrastructure development projects that included a water supply scheme of Makhi-Farash, transmission network, railway link, effluent disposal, etc. The meeting also discussed infrastructure projects that included a water supply scheme for Thar coalfields, a 296-kilometre-long road from Karachi to Islamkot via Thatta, and an airport at Islamkot with an estimated cost of Rs972 million.[1]

According to official sources, the chief minister emphasized that the development of Thar coal was the "central policy agenda of the government" and "indigenous resources could resolve the chronic energy problems of Pakistan for the next 100 years." TCEB, on the basis of recommendations of the committee, allocated coal blocks offered for bidding to various local and international bidding companies based upon the companies' financial strength, mining capabilities, and project timelines. The chief minister noted that a fiscal incentives package for indigenous coal-based projects had been approved.[1]

In January 2014, Prime Minister Mian Muhammad Nawaz Sharif and former President Mr. Asif Ali Zardari inaugurated wok on the project, which was described as a joint venture between the Sindh government and Engro Corporation. The joint venture was named Sindh Engro Coal Mining Company (SECMC). An announcement by Engro stated that "initial production will cater to around 600-1200 MW" and be "gradually scaled" to 5,000 MW.[4] A wholly owned subsidiary of SECMC by the name of Thar Power Company (THARCO), incorporated in 2013, would develop the power plant.[5]

In December 2014, "Engro Thar Coal-fired Power Plant 660 megawatts" was listed among the "Significant Energy Projects" totaling 10,400 megawatts agreed upon as part of the China-Pakistan Economic Corridor.[6]

In June 2015, it was reported the power station would be 660 MW at a cost of US$2.05 billion: the mining would cost $950 million and the power plant $1.1 billion.[7] The Private Power and Infrastructure Board approved the 660 MW power station, but the sponsor still needed to apply for a generation license.[8]

As of April 2016, SECMC had acquired 6,000 acres of land for Phase I of the coal mine project, and was working on acquiring another 8,000 acres for Phase II. Construction on the mine was slated to begin April 2016; the mine was scheduled to begin production in early 2019, and the coal power plant "soon after".[9]

In May 2016, it was reported that financial closure of phase I had been achieved and construction had begun.[10] In November 2016, the project's sponsors said the plant would be completed ahead of time in Q2 2019.[11]

Unit 1 was successfully synchronized to the grid in March 2019. A formal inauguration ceremony was held in April, with full commercial operation scheduled to begin by the end of June.[12][13]

Units 1 and 2 passed trial operation and began commercial operation on July 9, 2019.[14][15]

Phase II (Thar Energy & Thal Nova)

A further 2 x 330 MW was proposed as a second stage of the project (phase II), including units 3-4.[16][17]

Unit 3 later became a separate project known as the Thar Energy Limited power station.

Unit 4 also became a separate project, known as ThalNova power station.

Safdar Sohail presentation

A November 2015 presentation by Safdar Sohail, Economic Minister of Pakistan, described the Thar Engro project as a "Project of National Importance." The presentation made the following points:[18]

  • Sindh Engro Coal Mining Company (SECMC) is a joint venture owned 51% by the government of Sindh and 49% by Engro and Associates.
  • Ownership of Engro and Affiliates includes the following:
    • Engro (industrial conglomerate)
    • House of Habib (industrial conglomerate)
    • HUBCO (largest independent power producer in Pakistan)
    • Habib Bank Ltd.
    • Chinese investors
  • The project comprises two parts, a mining project under SECMC and a power project under Engro Powergen Thar Ltd (EPTL).
  • Mining capacity will ultimately reach 22 Mtpa
  • Power generation will ultimate reach 3,960 MW in the following phases
    • Phase I - 2 x 330 MW, subcritical plants supported by 3.8 Mtpa mine in Thar coal Block II
    • Phase II - 1 x 330 MM, subcritical coal plant supported by 1.9 Mtpa mine expansion (with an additional 0.8 Mtpa mining expansion for Jamshoro)
      • Subsequent phases - 4 x 660 MW supercritical coal plants supported by an additional 15.5 Mtpa of mining.

Financing

In June 2015, it was reported that China would provide US$200 million out of $950 million for the proposed mine and would finance $625 million out of $1.1 billion for the power generation.[7] In August 2015, a consortium of Chinese and Pakistani banks committed to fund the project. The project’s total debt component was US$1.5 billion, out of which $800 million would be financed by Chinese banks including China Development Bank and Industrial and Commercial Bank of China. Another $200 million would be arranged by China Machinery Engineering Corporation, the contractor of the power plant. Sindh Engro Coal Mining Company sponsors contributed equity of US$500 million, with local bank lenders including HBL, UBL, and Bank Alfalah. The National Electric Power Regulatory Authority approved a tariff to ensure a 20% rate of return on the project.[16]

In December 2015, the People's Republic of China granted approval for an investment of US$1.2 billion for establishment of a 660 MW coal plant and surface mining of 3.8 MTPA (million tonnes per annum) of Thar coal.[19]

In April 2016, the project reached financial close. Shareholders of both companies (Sindh Engro Coal Mining Company and Engro Power­gen Thar Ltd) would inject about US$500 million. A syndicate of local banks would provide $500 million for the mining and about $240 million for the power plant. The local syndicate was led by Habib Bank, United Bank, Bank Alfalah, Natio­nal Bank and Faysal Bank. In addition, a syndicate of Chinese banks consisting of China Development Bank, Construction Bank of China, and Industrial and Commer­cial Bank of China provided $820 million loans for the project.[20]

Opposition

The Thar Engro Coal Power Project was meant to be constructed in the Tharparkar District, Sindh, Pakistan. Backed by China and Pakistan companies, the plant began meeting opposition in 2015. There were street protests and visible mobilizations in reaction to the implementation of the plant, including lawsuits, public campaigns, street protests/marches, and sit-ins.[21]

In 2016, the Third Pole net reported how local people near the Thar Engro plant thought of the plant as “a nightmare” and a “black snake that is displacing us from our ancestral land.” They protested that though the plant was advertised for its energy infrastructure and monetary benefits, the less menial jobs were given to Chinese workers. The villagers also cited loss of land, trees, and water as a result of the construction of the Thar Engro power plant.[22]

In 2017, around 1,800 local people near the Thar desert and the power plant funded by Sindh Engro Coal Mining Company (SECMC) were set to be relocated from their original homes. One villager, Nabi Bux, explained how “the entire village… everything is covered with a thick sheet of dust due to the digging and the dumping of soil.” By June 2017, the villagers had filed a complaint in the high court saying that SECMC acquired their land without actual permissions of the villagers, thus violating the Land Acquisition Act of 1894.[23]

Protests against the Thar Engro power plant continued into 2018. The local population opposed the contamination of groundwater and the environmental disasters that the plant was bringing upon them. The power plant had serious, negative implications for the local villagers’ drinking water.[24]

Since the Thar Engro project is linked to China’s Belt and Road Initiative, hundreds of residents near the Thar Desert Region protested the power plant in Karachi on December 22, 2019. The protest was organized by the Bheel Intellectual Forum, an independent group that works for the rights of the Scheduled Caste community. The demonstrators cited destruction of the area’s climate and economy as reasons for opposition. They also argued that there were little jobs for locals from the power plant, and the land for the power plant was illegally acquired without approval of the village landowners.[25]

On May 29, 2020, the Centre for Research on Energy and Clean Air (CREA) published a study titled, “Air Pollution, Health and Toxic Impacts of the Proposed Coal Mining and Power Cluster in Thar, Pakistan.” The report stated that the projects like the Thar Engro power plant could lead to 30,000 air pollution-related deaths and 20,000 cases of child asthma. The Alliance for Climate Justice and Clean Energy, a local Thar platform comprised of Pakistan’s leading environmentalists, helped launch the report.[26]

Explosion at Unit 1

On March 2, 2022, an explosion occurred in the conveyor belt system of Unit 1. Engro confirmed in a press statement that at least five people were injured. The company temporarily shut down operation of the unit while the incident was investigated.[27] Footage of the event showed that the blast "engulfed" a small building which was believed to be the power house.[28]

Project Details

  • Sponsor: Thar Power Company (THARCO)
  • Parent company: Sindh Engro Coal Mining Company (a JV between the Sindh government and Engro (50%), House of Habib’s Thal Limited, Hub Power Company, HBL Bank and China Machinery Engineering Corporation)
  • Location: Thar Block-II, southeast of Singhara in Thatta district, Sindh province
  • Coordinates: 24.8124812, 70.394069 (exact)
  • Status: Operating
  • Gross Capacity: Phase I: 660 MW (2 x 330 MW)
  • Type:
  • Start year: 2019
  • Coal Type: lignite
  • Coal Source: Thar Mine (Block II)
  • Source of financing: US$831 million in debt from China Development Bank, Construction Bank of China, Industrial and Commercial Bank of China, Habib Bank, United Bank of Pakistan, Bank Alfalah, Askari Banki, Bank of Punjab, Faysal Bank, Meezan Bank, NIB Bank, Soneri Bank, Sindh Bank, and National Bank of Pakistan; US$277 million in equity from Engro, Habib Bank, China Machinery Engineering Corporation (CMEC), and Liberty Mills[29]

Articles and resources

References

  1. 1.0 1.1 1.2 "Centre to provide funds for Thar coalfield development," Dawn.com, May 14, 2011
  2. Ibrahim Sajid Malick, " World Bank abandons coal project in Pakistan," Pakistan Headlines Examiner, May 16, 2010
  3. "Sindh Engro coal project enters crucial phase," Jinah Se Quaid, date unknown
  4. "Nawaz-Zardari jointly inaugurate Sindh Engro Thar Coal project," Engro press release, January 31, 2014
  5. "Energy," Engro website, accessed March 2015
  6. Mian Abrar, "China-Pakistan Economic Corridor — A new vista of development in South Asia," Pakistan Today, December 6, 2014
  7. 7.0 7.1 "China billions drive Pakistan coal power expansion," RTCC, June 2, 2015
  8. "Chinese company to set up 1,400MW coal power project," Daily Times, June 17, 2015
  9. "SECMC's Thar coal mining project," Business Recorder, April 12, 2016
  10. "Two local coal-based power projects of 660 MW approved," Pakistan Today, May 3, 2016
  11. "Thar coal power plant to kickstart by June 2019," Geo.tv, November 15, 2016
  12. "History Redefined: Engro successfully synchronizes the 330MW power plant on Thar Coal," Engro press release, March 19, 2019
  13. "Pakistan’s first indigenous coal power plant to be inaugurated tomorrow," Business Recorder, April 9, 2019
  14. "Thar Coal Power Plant starts 660MW commercial operations," www.dailyparliamenttimes.com, July 23, 2019
  15. "【建设公司】巴基斯坦塔尔项目圆满完成168小时试运行," 建设公司, July 11, 2019
  16. 16.0 16.1 "Landmark deal seals finance of Thar coal mine," The Express Tribune, August 18, 2015
  17. "China agrees to add 660MW at Thar coal," Daily Times, October 21, 2015
  18. "Unearthing Pakistan's Power: Thar Coal - Key to Pakistan's Energy Security," Safdar Sohail, Economic Minister of Pakistan, November 17, 2015
  19. "CPEC project: China approves $1.2bn for coal mining, power plant in Thar," Dawn, December 16, 2015
  20. "Thar coal project achieves $2bn financial close after govt guarantee," Pakistan Kakhuda Hafiz, April 12, 2016
  21. “Sind Engro Coal Mining Company,” Environmental Justice Atlas, October 26, 2017
  22. “Pakistan’s coal expansion brings misery to villagers in Thar desert,” The Third Pole, August 23, 2016
  23. “Locals accuse Pakistan of doing the dirty by turning to coal to meet energy needs,” The Guardian, February 27, 2017
  24. “China’s Belt and Road Initiative in a Global Context: Volume II,” Syed, Jawad and Ying, Yung-Hsiang, 2020
  25. “China’s Belt and Road Initiative sparks protests in Thar,” Pakistan Forward, January 3, 2020
  26. “China-backed coal projects in Thar herald dark environmental future,” Pakistan Forward, June 5, 2020
  27. “At least 5 injured in explosion at Thar coal plant,” Dawn, March 2, 2022
  28. “Five injured in Tharparker power plant explosion,” The Express Tribune, March 3, 2022
  29. "Preview of Thar Block-II Thar Engro Coal-Fired Power Plant Phase 1 (660MW)," IJGlobal, accessed November 19, 2020

Related GEM.wiki articles

External resources