Oracle Coalfields’ Block VI Thar Coal Project and mine-mouth power plant in Pakistan’s Sindh province has been further boosted by the adding of the site to the priority list by the China-Pakistan Economic Corridor (CPEC). This should position the project on a fast track for approval of debt funding by Chinese Government agencies.
The sixth meeting of the Joint Cooperation Committee of the CPEC was held in Beijing on December 29 between the Government of China, led by the vice-chairman of the National Development and Reform Commission, and the Pakistan Government, led by the Federal Minister of Planning & Development. During this meeting it was confirmed that the Block VI project had been elevated to the priority list.
The CPEC has been set up to improve economic ties, in particular to support infrastructure and energy projects in Pakistan. Under the CPEC, the Chinese Government and Chinese banks aim to finance Chinese companies investing in approved projects under the CPEC as commercial ventures and help to operate the projects as profit making entities.
Oracle understands that the total financing made available to companies under the CPEC has increased to around US$50 billion. The debt component of Oracle’s Thar project is anticipated to be in the region of US$1 billion.
Oracle’s CEO Shahrukh Khan said: “Our elevation in the CPEC affirms the support that the governments of China and Pakistan are giving to our integrated coal mine and power plant project. We are delighted by this development, which should fast-track the funding of our project.
“As announced on June 3, 2016, the company has signed a conditional Shareholder Framework Agreement, whereby a consortium of new and existing Chinese partners will take 70% equity in its subsidiaries in Pakistan. Oracle confirms this agreement is still in place and the company looks forward to updating the market in the near term upon execution of a binding Shareholders Agreement, including specific terms of the transaction and its’ financing.”