Thar Energy Limited power station

From Global Energy Monitor
This article is part of the CoalSwarm coverage of Pakistan and coal.
Sub-articles:
Related articles:

Thar Energy Limited (TEL) power station is a proposed coal plant in Pakistan.

It is also known as unit 3 of the Thar Block II power station (also known as Thar Engro).

Location

The map below shows the location of the plant near Thar Block-II mine in Sindh province.

Loading map...

Background

Blocks in Thar coal field. Photo: Oracle Coalfields

The Thar Energy Limited power station and the ThalNova power station were formerly the second phase of the Thar Block II power station, but have become spun off into two separate projects, with separate ownership.

In October 2016, the National Electric Power Regulatory Authority (Nepra) accepted a generation license application from Thar Energy Limited (TEL) for a 330 MW mine-mount plant located in Thar Block II. The project is estimated at US$497.7 million. It will be financed mainly by debt raised from Chinese financial institutions, with the remainder raised from Pakistani banks.[1][2][3]

The project was permitted in May 2016.[4] The Private Power and Infrastructure Board issued a letter of support for the project in December 2016.[5]

In March 2017, Fauji Fertilizer Company, a subsidiary of the Fauji Foundation, took a 30% share in the project, and China Machinery Engineering Corporation, the project's engineering, procurement, and constructor (EPC) contractor, took another 10%. The construction schedule is 40 months, with completion thus planned for 2020. Initial groundwork on the project had already begun.[6][7]

In March 2018, Hubco, FFC, and CMEC signed the shareholders agreement.[8][9]

A June 5, 2018 updated list of "Upcoming IPPs" by the Ministry of Water & Power states Thar Energy (unit 3 of Thar Block II) will be commissioned in March 2021, with financial close "in progress".[10] A December 17, 2018 updated list of "Upcoming IPPs" by the Ministry of Water & Power states the unit is under construction.[11]

In November 2018, General Electric signed a 12-year equipment & maintenance services contract for the plant.[12]

In December 2018, Hubco signed a financing agreement with China Development Bank and Habib Bank for the plant's construction.[13]

On June 26, 2019, Thar Energy signed a land lease agreement with Sindh Engro Coal Mining Company for purchase of 244 acres of land for the coal plant project.[14]

Financing

In December 2019, a financing agreement was closed for the 330-MW project. US$390 million in loans will be provided by China Development Bank and Habib Bank. The financial advisor for foreign financing is China Development Bank; while the financial advisor for local financing is Habib Bank. US$130 million in equity is being provided by Fauji Foundation, Hub Power, and China Machinery Engineering Corporation (CMEC).[15]

Coal source

In May 2019, the provincial Chief Minister directed Sindh Engro Coal Mining Company, the company operating the Thar Block II coal mine, to expand production in order to produce enough coal to feed the Thar Energy Limited and ThalNova power stations.[16] An April 2019 Ministry of Energy document listed the project as under construction at that time.[17]

Project Details

  • Sponsor: Thar Energy Limited (TEL)
  • Parent company: Hub Power Company (Hubco) (60%), Fauji Foundation (30%), and China Machinery Engineering Corporation (10%)
  • Location: Thar Block-II, southeast of Singhara in Thatta district, Sindh province
  • Coordinates: 24.8062135, 70.4005007 (exact)
  • Status: Construction
  • Gross Capacity: 330 MW
  • Type: Circulating fluidized bed[12]
  • Projected in service: Mar. 2021
  • Coal Type: Lignite
  • Coal Source: Thar Block II
  • Source of financing: US$390 million in debt from China Development Bank and Habib Bank; US$130 million in equity from Fauji Foundation, Hub Power, and China Machinery Engineering Corporation (CMEC)[15]

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.[18]

In 2016, the Third Pole net reported how locals near the Thar Engro plant think 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 are being given to Chinese workers. The villagers also cite loss of land, trees, and water as a result of the construction of the Thar Engro power plant.[19]

In 2017, around 1,800 locals near the Thar desert and the power plant funded by Sindh Engro Coal Mining Company (SECMC) are 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.[20]

Protests against the Thar Engro power plant continued to 2018. The local population opposed the contamination of groundwater and the environmental disasters that the plant was bringing upon them. The power plant has serious, negative implications for the local villagers’ drinking water.[21]

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.[22]

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.[23]

Articles and resources

References

  1. "Nepra admits CPEC power generation plants application," Daily Times, October 6, 2016
  2. "SEPA holds hearing on TNPTL 330 megawatts coal-based power plan," Business Recorder, October 7, 2016
  3. "Thar coal project achieves $2 billion financial close after govt guarantee," Dawn, April 12, 2016
  4. "Two local coal-based power projects of 660 MW approved," Pakistan Today, May 3, 2016
  5. PPIB supports coal-based power plant under CPEC, Daily Times, 14 Dec. 2016.
  6. Hubco to divest 40pc shares in Thar Energy, Dawn, 16 Mar. 2017.
  7. Fauji Fertilizer and Hubco Join Hands for a 330MW Coal Power Plant in Thar, Pro Pakistani, 15 Mar. 2017.
  8. "FFC, HUBCO sign agreement to set up 330 MW coal power plant," IEA, Mar 19, 2018
  9. Analyst Briefing, Hub Power Company Limited, 2 Apr. 2019.
  10. "Upcoming IPPs," Private Power & Infrastructure Board, Ministry of Power, updated June 5, 2018
  11. "Upcoming IPPs," Private Power & Infrastructure Board, Ministry of Power, updated December 17, 2018
  12. 12.0 12.1 GE signs agreements to supply equipment and 12-year maintenance services for the 330 MW Thar Energy Limited Power Plant in Pakistan, GE press release, 7 Nov. 2018.
  13. Hubco signs financial deal for Thar Energy Limited in Beijing, Daily Times, 22 Dec. 2018.
  14. "Growth Aspirations," Hubco, accessed December 2019
  15. 15.0 15.1 "Preview of Thar Block-II Thar Energy Coal-Fired Plant (330MW) IPP | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-09-21.
  16. Hubco to set up two power projects in Thar, Express Tribune, 7 May 2019.
  17. Upcoming IPPs, Private Power & Infrastructure Board, Ministry of Energy, 17 Apr. 2019.
  18. “Sind Engro Coal Mining Company”, Environmental Justice Atlas, October 26, 2017.
  19. “Pakistan’s coal expansion brings misery to villagers in Thar desert”, The Third Pole, August 23, 2016.
  20. “Locals accuse Pakistan of doing the dirty by turning to coal to meet energy needs”, The Guardian, February 27, 2017.
  21. “China’s Belt and Road Initiative in a Global Context: Volume II”, Syed, Jawad and Ying, Yung-Hsiang, 2020.
  22. “China’s Belt and Road Initiative sparks protests in Thar”, Pakistan Forward, January 3, 2020.
  23. “China-backed coal projects in Thar herald dark environmental future”, Pakistan Forward, June 5, 2020.

Related GEM.wiki articles

External resources