Hub Power Company Limited (HUBCO), Pakistan’s largest Independent Power Producer (IPP), has disclosed its plans to provide up to $51 million in financial support for two of its key coal projects located in Thar, namely Thar Energy Limited (TEL) and ThalNova Power Thar (Private) Limited (TN). The company intends to extend Sponsor Support Contribution Letters of Credit (SSC LCs) for both projects to address funding requirements and potential shortfalls in debt servicing as the projects approach critical operational milestones.
In a notice to the Pakistan Stock Exchange (PSX) on Wednesday, HUBCO outlined that the board has approved special resolutions to offer guarantees of up to $31 million for TEL, a 330MW coal-fired power plant in Thar Block II, and $20 million for TN, another 330MW coal-fired plant at the same location. Both projects fall under the 2015 Power Policy of the Government of Pakistan, which guarantees a 20% return on equity in USD terms.
HUBCO stated that the proposed guarantees, which may be offered in the form of equity or subordinated debt, will extend the tenor of the support until January 2034 for TEL and July 2034 for TN, or until each project’s loan term ends. The company has already invested approximately $79 million in TEL and $52 million in TN. HUBCO is seeking shareholder approval for the guarantees at an Extraordinary General Meeting (EGM) scheduled for August 7, 2025.
