CHINA Power Hub Generation Company (CPHGC) has reached financial close on its Independent Power Project in Pakistan, one of the largest projects within the China Pakistan Economic Corridor (CPEC) initiative.
The required final notification by the Government of Pakistan was issued for financial close for the US$2 billion project which features two 660 MW imported turbines, plus a dedicated coal jetty at Hub, which is an industrial city located 45 kilometres along the coast east of Karachi.
CPHGC is a joint venture vehicle which is 74% owned by state owned China Power International Holding (CPIH), and 26% by Hub Power Company (Hubco), which is the largest IPP in Pakistan with an ownership of 26% shareholding.
Financing documents, including the main Foreign Loan Facility Agreement between CPHGC and a consortium of banks led by China Development Bank and the Export & Import Bank of China, were signed at a ceremony in Chengdu on October 24 2017. Participating banks include Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications.
The consortium of banks will provide up to 75% of the total US$2 billion project investment cost. To date, CPIH has provided US$300 million as shareholder loan to pay for construction.
The project will provide nine billion kWh electricity to the national grid each year, meeting the electricity needs of four million households in Pakistan.
CPIH is a wholly-owned subsidiary of State Power Investment Corporation (SPIC), which is one of the top five electricity producers in China. CPIH mainly engages in the development, construction, operation, overseas investment and financing, and capital operation of power generation projects. The company has assets in 23 provinces of China, as well as in Hong Kong and Macao. Overseas it has investments in Pakistan, Vietnam, Germany among other countries. By end of 2016, the total installed capacity of CPIH is 28110 MW, the company’s total assets have reached US$18.45 billion.
Hubco is the largest Independent Power Producer (IPP) in Pakistan, with total power generation capacity of over 1600 MW. The company’s assets include a residual fuel oil-fired thermal plant situated at Mouza Kund, Hub, which supplies the national grid.