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Fauji Fertilizer invests Rs1.1bln in Thar Energy

KARACHI: Fauji Fertilizer on Wednesday said it has invested more than one billion rupees in Thar Energy Limited (TEL) that is setting up a mine-mouth coal power plant with electricity generation capacity of 330 megawatts.
“Pursuant to the approval granted by the board of directors of the company in its 187th … meeting on April 3, 2018, the company has invested an amount of Rs1,100,400,000 in TEL by way of subscription to shares of TEL at the rate of Rs10/share, constituting 30 percent of the paid-up share capital of TEL,” Fauji Fertilizer said in a bourse filing.
Tahir Abbas, deputy head of Research at Arif Habib Limited said the start of the power plant will increase the electricity generation’s reliance on local coal tagged with cheaper mode of electricity generation.
“This would help in utilising local Thar coal mine other conglomerate/groups will invest in the upcoming mine mouth power plants in Thar, which would reduce country’s dependency on imported furnace oil and reduce import bill,” Abbas added.
TEL’s project cost is estimated at $497.7 million. Since the project is being set up on debt-to-equity ratio of 75:25, the equity portion of the project amounts to $124.4 million. China Development Bank has been engaged as the lead arranger for the foreign financing from China and Habib Bank Limited as the lead arranger for the local financing.
The project is envisaged to be completed in 40 months and the expected life of the plant is 30 years. Currently, Hub Power owns 60 percent stake in TEL, followed by Fauji Fertilizers (30 percent) and China Machinery Engineering Corporation (10 percent).
Source: The News