Titan Mining to provide $50m equity funding to K-Energy project in Pakistan
Monday, January 27 2014 - 12:52 AM WIB
K-Energy is a wholly owned subsidiary of BEEGL, established as the project IPP Company under the laws of Pakistan.
A consortium of Habib Bank and Faysal Bank have already agreed to structure and assist K-Energy in arranging up to $150 million debt financing from local and international sources for the project, says a letter issued by the consortium, Pakistan-based news portal The News reported.
Meanwhile, K-Energy, which is in process of setting up of a 420 (210 X 2) MW coal-based power project within the premises of K-Electric?s Bin Qasim thermal generation facility, has approached the National Electric Power Regulatory Authority (NEPRA) for the grant of a generation license, reads K-Energy?s application to NEPRA.
The energy generated by this project will be sold to K-Electric under a long term contractual arrangement as allowed by the Interim Power Procurement Regulations (IPPR) 2005. A key requirement of IPPR 2005 is the permission of the authority to K-Electric for the procurement of the power and determination of a feasibility stage tariff.
While K-Electric has filed its Power Acquisition Request with NEPRA on March 28, 2013, the request was returned on the ground that K-Electric?s assets to be leased are currently included in its existing generation license and, therefore, cannot be leased to K-Energy without prior modification of the K-Electric?s existing generation license in this regard, says an official document.
In its Aug 1, 2013 letter to Nepra, K-Electric has already requested the modification of its Generation License GL/04/2002 to exclude the assets it wishes to lease to K-Energy.
?The process for issuing a generation license to K-Energy has already been substantially delayed pending the modification of the existing generation license of K-Electric to exclude the said assets to be leased out to K-Electric,? K-Energy has written to NEPRA.
The $55.9 million project envisages the setting up of a 420 MW Coal Power Plant at Bin Qasim Karachi. The project is to be carried out through a Special Purpose Company under the name of K-Energy (Pvt.) Limited.
The project primarily entails the conversion of existing oil-fired generation units 3 and 4 of K-Electric?s existing thermal plant into coal-fuelled power generation units.
The project also includes the relocation/demolition of certain facilities such as a water treatment plant and storage tanks, a hydrogen plant, a warehouse and workshop etc.
A new water treatment plant and storage tanks will be constructed prior to the demolition of existing ones in order to minimize the plant downtime.
The contractor will be responsible for training the owner?s personnel who will operate the converted units and coal systems under the contractor?s guidance. (*)