25th Sep 2014 10:47
LONDON (Alliance News) - Oracle Coalfields PLC Thursday said it has signed a engineering procurement and construction agreement in Beijing with SEPCO Electric Power Construction Corp for the construction of an integrated coal mine and power plant.
SEPCO is a power and construction group in China.
Oracle Coalfields, which is a developer of a lignite coal mine located in the south eastern Sindh Province in Pakistan, said the construction of the integrated coal mine and power plant is a major milestone in the development of the Block VI project in the Thar Coalfields.
Through its local coal mining subsidiary Sindh Carbon Energy Ltd, Oracle owns the mining lease for Block VI in Thar Coalfield, for the mining of lignite coal. Oracle plans to develop the mine and to sell coal to a new created company, provisionally called Electric Power Ltd, at an integrated power station next to the mine.
Oracle said that SEPCO has also proposed a financing structure to potentially securitise up to 85% of the cost of the two EPC contracts, which would be provided by Sinosure, the China Export & Credit Insurance Corp, and some Chinese banks.
The EPC contract is for a 4.2 million tonnes per year coal mine and the 600 megawatt power plant.
The combined EPC transaction value is around USD1.3 billion, Oracle said.
The EPC framework agreement confirms SEPCO's intention to purchase minority equity interests in Electric Power and to potentially make an investment in Sindh Carbon Energy Ltd, Oracle said.
"Entering the EPC Framework Agreement with and receiving a financing proposal from one of China's largest state-owned enterprises in the energy sector is another step towards bringing the project to reality. Both SEPCO and Oracle are eager to succeed in the development of our integrated coal mine and power plant project and to play an effective role in addressing Pakistan's energy crisis," said Oracle Chief Executive Shahrukh Khan in a statement.
Shares in Oracle Coalfields were trading 5.1% higher Thursday late morning, at 1.34 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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