Karachi April 15 2023: Lucky Electric Power Company Limited is expected to receive Thar Coal from May 2024 against earlier expected date of May 2023 due to delay in development of Thar coal Block-II Phase III.
Lucky Electric Power Company Limited (LEPCL) has set up a 1x660MW (gross) coal-fired power plant. The project achieved COD in March-22 and is successfully connected to and providing electricity to the grid. The primary fuel is Coal; a coal supply agreement is signed with Sindh Engro Coal Mining Company (SECMC), SECMC will provide the coal from its developing Block-II (Phase III), which will be started in May-24 against the previous tentative month was May-23.
With the expansion of Thar Coal Block II Mine to 12.2 million tons per annum (Phase III), coal price of Thar Coal Block II mine shall reduce to 27 USD/ton. At a price of USD 27 per ton, SECMC Block II coal shall become the cheapest fuel source in the country and will ensure economic stability and energy security for the country. It shall enable Pakistan to save USD 420 million per annum on the account of foreign exchange. Additionally, this expansion of SECMC’s Block II mine, shall lead to a reduction of PKR 74 billion in circular debt on an annual basis.
The Company has also signed imported coal supply agreement with reputable coal suppliers. Currently, plant is generating electricity through the mix of local & imported coal.
The Company has generated 1.8 million MWh since Mar'22. The Company has generated a topline of ~ PKR 45.7 billion during 6MFY23. Lucky Electric Power Company Limited generated a humble bottom line of ~PKR 2.19 billion during the same period.
Company has replaced its O&M Contractor, KEPCO Plant Services & Engineering Co. Ltd - Republic of Korea (KPS) with M/s Harbin Electric International Co., Ltd. -P.R. China (HEI).
“Going forward, the Company’s main focus would be to keep the plant operational. The Company has procured short-term financing facilities aggregating to PKR 45.2 billion (including the debt instruments amounting to PKR 27 billion) for operational needs” Says Company Chairman Muhammad Ali Tabba.
However, considering the unusual increase in working capital requirement due to the significant devaluation of PKR, supply chain issues and tariff adjustments LEPCL is striving to manage its need. The offtake agreement is with CPPA-G, which will, upon the plant’s availability as per the contract, provide capacity payments even if no purchase order is placed. The Government of Pakistan has given a payment guarantee against dues from CPPA-G.