31st Jan 2019 15:44
LONDON (Alliance News) - Oracle Power PLC said Thursday it has, along with its partners, agreed to provide a minimum of USD2.5 million for pre-development funding for its lignite coal mine and mine mouth power plant in the Thar desert in Pakistan.
Oracle Power, Beijing Jingpeng Power Co Ltd and PowerChina International Group Ltd will split the pre-development funding in line with their stake in the project, with Beijing Jingpeng Power paying 78%, Oracle 12% and PowerChina 10%.
Oracle Power said the funding will be sufficient to meet the projects costs for 2019. The total costs for phase one of the project is expected to cost about USD1.6 billion, with a debt to equity ratio of 75 to 25.
The company said its Chinese partners will be responsible for sourcing the debt, through Chinese banks. The USD400 million equity funding is expected to be split in relation to the partner's stake in the project.
"This is a significant development for Oracle as we progress our work with BJPC and PowerChina. Once finalised, this will be the first time our partners deploy their own capital directly into the project," said Chief Executive Officer Naheed Memon.
"Initially it was envisaged that Oracle would fund all costs ahead of financial close, with subsequent reimbursement upon reaching financial close. This development therefore is warmly received by the company and should give Oracle shareholders significant optimism with regards the likelihood and timing of reaching financial close."
Memon added: "Block VI is a project of both national and international significance, evidenced by its inclusion on the Priority List of the China Pakistan Economic Corridor. We have witnessed strong support from both the Pakistan and Chinese Government authorities over recent months and are eager to bring the project to financial close."
Shares in Oracle Power were down 1.1% at 0.47 pence each.
Related Shares:
Oracle Power