China Power Hub Generation Company Pvt. Ltd. (CPHGC) and a consortium of banks, led by China Development Bank (CDB) and the Export & Import Bank of China (EIBC) have signed financing documents including the main foreign loan facility agreement on 24th October, 2017, in the Chinese city of Chengdu.
The consortium of banks will provide up to 75% of the total investment, which is approximately $1.5 billion. To-date, CPIH has provided $300 million as shareholder loan to pay for project construction.
Representatives of China Power International Holding Ltd (CPIH), Hub Power Company (HUBCO), CPHGC, CDB, EIBC as well as the other participating banks of the Consortium including Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications were present at the signing ceremony.
The project of CPHGC is located in Hub, Balochistan, 45 km northwest of Karachi. The equity proportion of CPIH in CPHGC is 74% and that of HUBCO is 26%. The total investment in the project, that includes 2x 660MW Imported Coal-Fired Power Plant and a dedicated Jetty, is approximately $2 billion.
During commercial operations, the project will provide 9 billion kWh electricity to the National Grid every year that will meet the electricity needs of 4 million households in Pakistan.
At the signing ceremony, Mr. Zhao Yaozhong, President of Sichuan Province, Branch of China Development Bank (CDB), said:
China Development Bank is the largest foreign investment and financing cooperative bank in China as well as the largest development financial institution in the world, with an estimated gross asset nearing ¥16 trillion ($2.4 trillion).
Until now, China Development Bank has supported 19 projects in Pakistan with a combined worth of around $7.8 billion, covering a number of key areas of cooperation between China and Pakistan.
Since 2006, China Development Bank has established a good cooperative relationship with Pakistani government, local banks and Pakistan-based Chinese enterprises, giving a credit of $1.7 billion to Ministry of Finance of Pakistan, and $500 million to HBL, which boosted the cooperation on credit among Chinese banks, Ministry of Finance of Pakistan and other Pakistani financial institutions.
Mr. Yu Bing, Chairman of China Power International Holding, quoted the speech by President Xi Jinping in the 19th National Congress of the Communist Party of China, saying that China adheres to the fundamental national policy of opening up and pursues development with its doors open wide.
China will actively promote international cooperation through the Belt and Road Initiative. In doing so, we hope to achieve policy, infrastructure, trade, financial and people-to-people connectivity and thus build a new platform for international cooperation to create new drivers of shared development.
Mr. Yu added, as a reliable and responsible state-owned energy enterprise, CPIH is committed to the Belt and Road Initiative, and is actively participating in the construction of China-Pakistan Economic Corridor. CPHGC project is recognized as one of the “Priority Projects” under CPEC and it is highly valued by the governments of both sides. The CPHGC project is on course for financial close by the end of 2017.
China and Pakistan are all-weather strategic cooperation partners. Pakistan shares the best and firmest cooperation relationship with China.
As a good neighbour, friend, partner and brother, Pakistan works closely with China on international political affairs and bilateral concerned areas. CPHGC project not only reflects the economic cooperation between China and Pakistan, but also represents the deep and firm brotherhood. It will bring immense socio-economic benefits for Pakistan.
After the commercial operation of the project, it will effectively ease the situation of Pakistan’s electricity shortage, bring considerable tax income and employment opportunities, improve the local people’s livelihood, continue to promote Pakistan’s economic and social development and political stability.
Mr. Khalid Mansoor, CEO, HUBCO, introduced the Hub Power Company and its projects in Pakistan, also expressed his appreciation to the hard work of CPIH, CPHGC and Financing Team.