ADB seeks justification for $5.2-bn power loan to Pak

Faisalabad: The Asian Development Bank is in negotiations with private sector for providing financial assistance of $2.75 million as Equity Investment and $44 million as partial credit guarantee for Daharki power project.

Sources in 'Private Sector Operations Department' of Asian Development Bank said that the project involves construction of a 175MW, low-British thermal unit (BTU) gas-fired combined-cycle power plant (CCPP) at Daharki, some 15 km away from the Mari gas fields. The project would be one of the first developed under the 2002 Power Policy, and would be undertaken according to a 25-year 'Build, Own, and Operate' (BOO) structure with a tariff agreed and approved by the National Electric Power Regulatory Authority (Nepra).

The project would supply electricity to the National Transmission Dispatch Company (NTDC) through the 220 KV Dharki-Rohri transmission line that passes close to the project. ADB will participate in the equity up to 25 percent and also guarantee the leverage of the holding company to enhance equity returns, sources said.

They said that the project aims to help meet the growing energy deficit by adding some 175 MW--about 12 percent of the forecast shortfall in 2007.

This project aims higher energy efficiency in Pakistan's electricity generation mix, through the commissioning of a dual-cycle, low-BTU gas-fired plant with its own assured domestic gas supply; and develop the private sector through support to one of the first independent power producers (IPPs) under the recent 2002 Power Policy which, it is hoped, would set the precedent for further development of IPPs to provide impetus to the Government's plans for expansion in generation capacity as set out in the country's Medium Term Development Framework.