As part of agreement, the companies will prepare technical feasibility study and an environmental impact study for the project, including design, construction and operation plans, and plans to finance up to 70% of the debt for the power plant and also provide equity funding for a majority stake in the new company, with Oracle taking a minority interest.
The six-month agreement will also develop plans for Sepco to provide equity funding in Oracle’s coal mining subsidiary, Sindh Carbon Energy Limited (SCEL), to secure a significant minority shareholding.
Oracle plans to develop a mine and subsequently sell coal to an integrated power station (IPS) at the mine, which will be built, owned and operated by a newly incorporated power company.
Oracle CEO Shahrukh Khan said the Thar Coalfield project will be uniquely placed to be a major supplier of power to Pakistan for the next 20 years and beyond.
”We look forward to working with SEPCO on the development of a sizeable power generation project where they will bring not only their technical construction experience but also provide the project with access to equity and debt funding," Khan added.
Sepco MD Liu Chuanming said, ”We expect the power supply will benefit industrial power consumers and accelerate the economic growth in Pakistan.”
Oracle has already signed a joint development agreement with CAMCE, a subsidiary of China National Machinery Industry, for the mine development in September 2013.
