CHINA Power Hub Generation Company (CPHGC)’s 1,320MW coal-fired power plant in Pakistan has put in place a debt facility led by China Development Bank (CDB) and Exim Bank of China.

The bank loan signing comes as the Pakistan Atomic Energy Commission gets ready to award a contract for a 1,100MW nuclear reactor – possibly before year end.

Total investment on the 1,320MW coal-fired power plant is estimated at US$1.5 billion, with the bank consortium providing 75% of this amount (US$1.125 billion). The bank lending group includes Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications. A signing ceremony was held in Chengdu.

The CPHGC project is located in Hub, Balochistan, 45 kilometres northwest of Karachi. The developers are China Power International Holding (CPIH) with a 74% share and Hub Power Company (Hubco) with 26%. Pakistani power plant owner Kot Addu Power Company recently bought a stake in Hubco for US$210 million. To-date, CPIH has provided US$300 million in shareholder loans to pay for project construction, with preliminary work having got underway in March.

The Hub plant will be powered by two 660MW coal-fired turbines. Commercial operations are expected to start in August 2019, with the National Grid as offtaker.

At the Hub signing ceremony in Chengdu, Yu Bing, chairman of CPIH, quoted the recent speech by President Xi Jinping at the 19th National Congress of the Communist Party of China, that China adheres to the fundamental national policy of opening up and pursues development with its doors open wide.

“As a reliable and responsible state-owned energy enterprise, CPIH is committed to the Belt and Road initiative, and is actively participating in the construction of China-Pakistan Economic Corridor,” said Yu.

The power plant is viewed as an important project in the China-Pakistan Economic Corridor (CPEC) initiative, itself an important pillar of the Belt Road project. The CPEC initiative comprises a collection of infrastructure projects currently under construction in Pakistan, including the flagship Gwadar port project.

At a regular press conference on November 3, Ministry of Foreign Affairs spokesperson Hua Chunying rejected reports that there is slow progress being made in the implementation of CPEC and the Belt and Road initiative.

Asked about a report from Agence France-Presse that projects were moving slowly in countries such as Pakistan, Uzbekistan, Kazakhstan, Indonesia, Thailand, Laos and Singapore, she responded, “I don't know how did they come to such a conclusion- what is it based upon?”.

Hua cited a November 2 briefing by a Commerce Ministry spokesperson, who pointed to progress on major infrastructure projects including the China-Laos railway project, highways in Pakistan, and oil and gas pipelines projects between China and Russia, China and Kazakhstan, and China and Myanmar.

A key part of Pakistan's plans involves solving energy shortages by building new nuclear power plants, with China providing both the technology and financing.

Pakistan currently has five nuclear reactors in service. Two Chinese-built 1100MW reactors are currently under construction near Karachi, and are expected to come online in 2020 and 2021.

Speaking to Reuters on the sidelines of a conference in Abu Dhabi, Pakistan Atomic Energy Commission chairman Muhammad Naeem said that a contract for an eighth reactor (also 1100MW) could be awarded before year end.

He added that it was likely that Pakistan would build another three or four reactors of a similar size by 2030, bringing the country's total nuclear capacity to 8,800MW.