Engro Corporation announced that its board of directors have approved an investment of $21.375 million by way of subscription of ordinary shares in Siddiqsons Energy Limited.
Engro had entered into a joint-venture agreement (JVA) with Siddiqsons Limited and Arif Habib Limited to set forth the terms and conditions governing their relationship and to record their respective rights and obligations in relation to the management and functioning of the SPV and other incidental matters relating to the SPV.
Siddiqsons Energy Limited is a special purpose vehicle (SPV) established to develop around 330 megawatts of Thar coal-fired power generation facility in Block II, district Tharparkar Sindh on a build, operate and own basis, read the notification.
They said the deal remained subject to execution of relevant agreements.
Eight years ago, Engro bought the rights to one of Thar’s 13 blocks, containing 1% of the reserve (more than enough given the gargantuan size of the mine).
They formed the country’s biggest ever public-private partnership, the Sindh Engro Coal Mining Company (SECMC), in which Engro digs and the state provides infrastructure.
When the coal is reached, as is expected in mid-2018, it will feed a pit-mouth power station constructed by Engro, and, in time, three others owned by partners in the SECMC.
These stations will furnish around a fifth of the country’s electricity for the next 50 years according to a report in The Economist earlier.
Engro’s script at the bourse was trading at Rs 312.25, up by 1.66% with a turnover of 448,300 shares.