The Sindh government on Friday signed an Implementation Agreement with Sindh Engro Coal Mining Company and a Water Utilisation Agreement with Engro Powergen Thar Limited.
Under the Implementation Agreement with Sindh Engro Coal Mining Company, the government will commit to providing all required infrastructure to facilitate the mining project which could amount to Rs 60 billion.
The Joint Venture Agreement under which SECMC was formed provides the Government of Sindh with majority shareholding in the company (51%) and also puts the responsibility on the government for the provision of key infrastructure such as road networks, airport facilities, water supply scheme, effluent disposal scheme as well as all required security for expatriate employees who are expected to arrive in the area early next year.
The signing of this agreement represents the provincial governments’ support in expediting the timely execution of the Thar Coal Project and furthers its resolve to encourage economic prosperity in the country by facilitating the requirements of investors for the financial close of SECMC’s mining Project.
The associated power plant being established by Engro Powergen Thar Limited (EPTL) is also nearer to achieving financial closure with the signing of the Water Utilisation Agreement with the government of Sindh. Under this tripartite agreement, the Thar Power Company, a subsidiary of SECMC, will be responsible for operating and maintaining the infrastructure facilitation while the government of Sindh (Irrigation Department and Energy Department) will ensure the allocation of 17.5 cusecs of treated water for the functioning of EPTL’s power project in Block 2. Under the agreement, concerned GoS departments will be responsible for constructing water supply infrastructure from the LBOD to Nabisar whereas EPTL will be responsible for establishing the same after Vajihar. The agreement is a pivotal step for achieving financial closure for EPTL’s power project as it secures the water source for the functioning of the power plant.
Both agreements mark the start of an era which will usher in energy security and economic prosperity for Pakistan as both mining and power projects move closer to financial closure which is expected by the end of the year. These agreements will allay concerns of the Chinese investors, with whom both companies have been in negotiations for securing financing for the mining and power projects. The project is designed to utilise indigenous energy resources while also bringing prosperity to the people of Thar.