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Port Qasim Coal-fired Power Project
Special Report on CPEC Projects (Energy: Part 7)

1. Brief introduction

Port Qasim coal-fired power project is jointly developed by PowerChina Resources Limited (51% shares) and Al Mirqab Capital (49% shares), which is one of the largest prioritized projects in the energy sector of the China-Pakistan Economic Corridor (CPEC).

The project is located in the Port Qasim Industrial Park, 37 km southeast of Karachi, and consists of plant, jetty and channel. The plant adopts the world’s leading technology - supercritical thermal technology with gross capacity of 2*660 MW. The construction work commenced in May 2015. The power generation of the 1st unit is scheduled at the end of November 2017, and Commercial Operating Date (COD) will be reached in June 2018.

The total investment of project is approximately USD 2.085 billion, with the ratio of equity and debt approximately 25%:75%. Debt will be arranged by the sponsors from the Export-Import Bank of China (China EXIM Bank), without increasing the financial burden of Government of Pakistan. The Investment Agreements were signed under the witness of President Xi Jinping and Prime Minister Nawaz Sharif during President Xi’s visit to Pakistan in April 2015, and financial close was reached in December 2015.

2. Latest progress

Financing and equity injection: USD 346 million (i.e. 65.3% of total equity) has been injected by the shareholders, PowerChina Resources Ltd. and AMC, Qatar. Cumulative utilizations of loan amounting to USD 975 million (i.e. 62.7% of total loan) have been made from China EXIM Bank.

Power plant construction: 90% of civil work and 62% of installation work has completed.

Jetty & channel construction: 92% of the Jetty & Channel construction has completed.

PowerChina is committed to addressing the dire energy shortage in Pakistan and to bring sustainable, reliable and affordable energy to the people of Pakistan.

3. Corporate social responsibility

1) Creating more jobs for talented engineers, graduates and skilled labors

A recruitment interview of Pakistani graduates was held at Karachi at the end of July 2016 and 16,000 engineers submitted the application online for the jobs. After prudent screening, testing and interviewing the candidates, 104 young and dynamic engineers were selected and sent to China for a 5-month training. They will be back to the project site after completing training sessions, take charge of the installation and commissioning of the plant, as well as the operation and maintenance (O&M) work. The project directly creates over 5000 jobs to Pakistani engineers and labors during construction period, and around 300 jobs during operation period.

2) Contributing to federal and local fiscal income

Till April of 2017, the project company has paid in full all applicable taxes amounting to USD 66.41 million to Pakistani Government, including federal taxes, provincial taxes, sales taxes, and tariffs, and fulfilled all the obligations as a responsible taxpayer, which has contributed to the increase of local and federal fiscal income effectively.

3) Adopting high standard environmental protection technology

Fueled by coal, the project adopts the world’s leading supercritical thermal technology. The environment friendly operation including seawater desalination and flue gas desulfurization will help saving the freshwater, and preventing the surrounding marine ecosystem of the project from the damages and hazards.

Sindh Environmental Protection Agency (SEPA) granted approvals of environmental impact assessment of the power plant and jetty respectively on 17 June 2014 and 30 January 2015, after detailed evaluation procedures including rounds of public hearings attended by local residents, communities, government authorities, factories, NGOs, fisheries' association, research institutes and media. In addition, the environmental protection technology also meets the environmental standards of World Bank as well.

4) Greatly relieving the power shortage

The annual energy output is around 9000GWH after COD, which is able to support 3-4 million families’ daily power consumption and will help to alleviate the load shedding in Pakistan.

(He Shiyou, Deputy General Manager, Port Qasim Electric Power Co. (Pvt) Ltd.)

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