"Prime agenda of the meeting will be conversion of existing 800 MW power plants and setting up of new 600 MW thermal power plants at Jamshoro on Thar Coal and to review the status of Asian Development Bank's (ADB) funding for the existing and new Thar Coal-based power plants," they added.
Sources informed that Sindh government had been negotiating with ADB for financing to convert the existing oil-based power plants into coal of Thar and several meetings with ADB had been already held to initiate this project. Sindh Government was trying to convince the federal government and foreign lenders that Thar coal was the most feasible fuel for the power plants, they said and added that "it will be a great tragedy if despite availability of huge coal reserves in the country, Pakistan continue to import fuel by using huge amount of foreign exchange".
Sources said that Secretary Ministry for Water and Power Nargis Sethi was also keen to get foreign funding for coal-based power plants and she had played vital role in convincing ADB for financing of Jamshoro power plant. The Sindh Engro Coal Mining Company Limited (SECMC) is a joint venture of the Government of Sindh and Engro Powergen, to mine coal from Thar Block II. SECMC and the Engro Corporation are jointly working on an integrated coal mine and a power project at an estimated cost of $3 billion at Block 2 of the Thar Coal Project. "The project has been planned to mine 6.5 million tons coal per annum to generate 1200 MW power at the attached and new proposed coal-based power plants," they added.
Sources informed that Engro was unable to attract support of international financial institutions for Thar Coal Project, as it was already in facing some troubles to retire previous loans obtained for fertiliser plant. Therefore, some international financial institutions are seeking sovereign guarantee to finance Thar Coal project, they added.
"Presently, Engro is unable to pay back the loans worth $1.1 billion of its fertilizer plant to foreign lenders, which is also hurting its ability to generate any foreign investment for Thar Coal project," they added. In order to support its partner in Thar Coal Project, Sindh government has requested federal government to help Engro in its current difficult financial position and provide gas on short term basis from unused gas of Kandkot gas field, they added.
The sources maintained that Sindh government was also supporting Engro's plea for diversion of 60 mmcfd of Mari gas currently going to Guddu thermal power plant, which could be run at Kandkot' unused gas, and additional supply of 22 mmcfd gas from Mari can be supplied to Engro's new fertiliser plant to produce urea. This could offset its losses and enable it to payback its loan to international financial institution to regain their trust, they mentioned.
Sources said that Engro has defaulted on its loan obligations and recently rescheduled its debt, provided by banking sector of Pakistan as well as the World Bank and other foreign government owned financial institutions from Germany, Netherlands etc.
Apart from Prime Minister Raja Pervaiz Ashraf, Chief Minister Sindh Syed Qaim Ali Shah, Finance Minister Dr Abdul Hafeez Shaikh, Minister for Water and Power Chaudhry Ahmed Mukhtar, Advisor to PM on Petroleum and Natural Resources Dr Asim Hussain, Deputy Chairman Planning Commission Dr Nadeemul Haq, Federal secretaries of Finance, Planning Division, and Water and Power, Chief Secretary Sindh, Member Science and Technology Planning Commission Dr Samar Mubarakmand, MD Thar Coal Board, CEO Genco Holding, President Engro Corporation, CEO SECMC and other senior officials are expected to attend the meeting.
It may be mentioned here that Thar Desert, located in Sindh, contains the world's 7th largest coal reserves, totalling an estimated 175 billion tons of Lignite grade coal. This is equivalent to 50 billion ton of crude oil, more than Iran and Saudi Arabia's combined oil reserves.