ISLAMABAD: The time limit for achieving the financial close of two major power projects for Chinese investors has been extended by the government on Tuesday.
These projects include the 4,000-megawatt Matiari-Lahore transmission line and 300MW Gwadar Coal Power Project which come under the China-Pakistan Economic Corridor (CPEC), reports Dawn.
A meeting of the Private Power and Infrastructure Board (PPIB) held on Tuesday chaired by Power Minister Omar Ayub Khan gave a three-month extension to the $1.7 billion Matiari-Lahore for reaching its financial close by February 29th, 2019.
In March this year, the contractors had been granted a six-month extension to achieve financial close by December 1st.
The revised deadline was validated on the assurance that commercial operation data (COD) of the project wouldn’t be revised and remain the same as March 31st, 2021.
The reason for the delay was in stiffening up transmission line service agreement, the conclusion of loan linked issues with the State Bank of Pakistan (SBP) and complications in land leases.
Similarly, a nine-month extension was granted to the 300MW Gwadar coal-based power project to reach its financial close by August 2019.
It has faced numerous delays previously and has experienced changing investor portfolio.
According to informed sources, the project still had many problems to solve since contractors have encountered problems in acquiring land, which has been resolved mostly but would need cost revisions in the tariff, whilst some delays were because of internal management and environmental issues.
And doubts still linger over the project, but the Pakistani authorities have been driving for its completion to guarantee uninterrupted power supply to Gwadar Port and allied establishments, said informed sources.
According to PPIB, these extensions would allow sponsors to get tariff from the power regulator and LOS from it.
Nonetheless, this would allow construction work to commence and provide much-required power supply to Gwadar for enabling promotion of businesses for the newly established port, enhance socio-economic activities and start the Special Economic Zones and Export Processing Zones in Gwadar.
As per an official statement issued by PPIB on Tuesday read, “Keeping in view the importance of much needed +660kV High Voltage Direct Current (HVDC) Matiari-Lahore Transmission Line Project which is specifically designed to provide power evacuation for Thar coal-based power projects, the board has agreed to allow extension in letter of support (LoS) for achieving financial close.”
“It was explained that it was the first HVDC line in the country and also the first private sector transmission project under CPEC which had achieved substantial progress. “Such extensions would not compromise the completion date of the project which is March 2021,” it added.