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GOVERNMENT OF PAKISTAN
MINISTRY OF WATER AND
POWER
(PRIVATE POWER AND
INFRASTRUCTURE BOARD)
PRESS RELEASE
FIRST HYDROPOWER
IPP ACHIEVES FINANCIAL CLOSE
ISLAMABAD, 4th December 2009: Being a regional leader in thermal IPPs, Pakistan has
achieved another major milestone with the Financial Closing of its
first hydro IPP. The 84 MW New Bong Escape Hydropower Project of
Hubco Laraib Energy Limited declared Financial Closing and
Government of Pakistan (GoP) has executed the GOP Guarantee which
was signed at Private Power and Infrastructure Board (PPIB) by Mr.
Fayyaz Elahi, Managing Director, PPIB on behalf of the GoP, while
Mr. Khalid Faizi, CEO and Mr. Hasnain Hyder, COO signed the said
guarantee on behalf of Hubco Laraib Energy Limited. The power
project is located 7.5 kilometers downstream of Mangla Dam, in Azad
Jammu and Kashmir and is expected to be commissioned by May, 2013 to
sell electricity to WAPDA/NTDC for supplying clean, reliable and
cheap energy to the consumers of Pakistan.
The sponsors of the
project are Hub Power Company Ltd i.e HUBCO (wherein majority
shareholder is International Power of UK), Coate and Co. (Private)
Limited and Continental Power Limited who are investing US$ 53.72
million through equity. The project is being financed with debt
financing of US$ 161.14 million through both local and foreign
lenders. The foreign lenders include Asian Development Bank (ADB),
Islamic Development Bank (IDB), International Finance Corporation (IFC),
PROPARCO of France while the local lenders include Habib Bank
Limited (HBL) and National Bank of Pakistan (NBP).
The New Bong Escape Hydropower Project assumes further importance
because with its Financial Close, hydropower security package
prepared by PPIB has been accepted by international investors and
lenders and will now form the basis for other hydropower projects to
come, furthermore the tariff mechanism prepared by PPIB and NEPRA
with consultation of all stakeholders is now the basis for tariff
determination for future hydropower IPPs in Pakistan. The project
will open doors for quick implementation of a portfolio of
hydroelectric projects under process with PPIB and is proof of
international investors’ and lenders’ confidence in Pakistan’s power
sector.
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