INVESTMENT OPPORTUNITIES IN PAKISTAN POWER SECTOR

DECEMBER, 2016

PRIVATE POWER AND INFRASTRUCTURE BOARD

GOVERNMENT OF PAKISTAN

PAKISTAN POWER SECTOR -

TOTAL INSTALLED CAPACITY

2

Total Installed Capacity 24953 MW

MW %

Public Sector

Hydel 7013 28

Thermal 5458 22

Nuclear 787 3

Total 13258 53

Private Sector

IPPs 9273 37

KELectric 2422

10

Total 11695 47

Public Sector Hydel, 7013,

28%

Public Sector Thermal, 5458,

22%

Nuclear, 787, 3%

Private Sector, 11695, 47%

Total 24953

Source: Power System Statistics – 39th Issue

3

PAKISTAN POWER SECTOR – KEY PLAYERS

Private

Sector

IPPs

(Hydel, Oil,

Gas, Coal)

KESC

Provinces

Khyber

Pukhtoon

Khwa

Punjab Sindh Baluchistan

AJK Gilgit

Baltistan

IPPs/ SIPPs

(Small Hydel, Wind,

Solar, Bio Diesel, Bio

Mass, Cogeneration)

Ministry of

Water

& Power

Pakistan

Atomic

Energy

Commission

NEPRA

WAPDA AEDB PEPCO PPIB

Mega Dams Water

Projects GENCOs DISCOs NTDC

CHASNUPP KANUPP

GOVERNMENT OF PAKISTAN

IPPs

NEPRA

Gas/ Fuel Supplier

LOI/ LOS/ IA

PPA GSA/ FSA

DIA

GoP

NTDC

Tripartite LOS

CSA: Coal Supply Agreement GSA: Gas Supply Agreement PPA: Power Purchase Agreement IA: Implementation Agreement DIA: Direct Implementation Agreement

Provincial Govt./ AJ&K

WUA/ CSA

Lenders

IPP MODEL BEING EXECUTED BY PPIB

Financing

Tariff/ Generation Licence

Transmission Licence

OGRA

Fuel Price

EPC/ O&M Contractors

EPC /O&M Contracts

4

PPIB - A ONE WINDOW FACILITATOR

5

Created in August 1994 as a one-window facilitator on behalf of GOP, its

Ministries/ Departments to promote private investments in power sector

Received statutory status on 6th March 2012 through an Act of the Parliament

Approves IPPs and executes Implementation Agreements and provides GOP

guarantees on the name of President of Pakistan

Facilitates IPPs in executing PPA, FSA/GSA WUA with relevant GOP agencies

Coordinates/ Liaisons with local and international multilateral development/

Financial Institutions

Out of a total of 31 IPPs, PPIB managed to induct 29 (IPPs) totaling 6,118 MW

with an investment of around US$ 7 billion.

Attracted leading international/ local investors and lenders to the Pakistan

Power Sector

Succeeded in commissioning of first Hydel IPP in Pakistan and AJ&K i.e. 84

MW New Bong Escape Hydropower Project

6

PRIVATE POWER PROJECTS IN OPERATION

Number of Capacity Investment

Projects (MW) (Million US$)

Project prior to 1994 Power Policy 1 1292 1,608

Projects under 1994 Power Policy 15 3100 3,490

Project privatized from public sector 1 1638 1,583

Project under 1995 Hydel Policy 1 84 215

Projects under 2002 Power Policy 13 2934 3,248

Total 31 9048 10,144

6

INVESTORS LENDERS

Local Foreign Local Foreign

Nishat Group

Sapphire Textile Ltd.

Attock Refinery Ltd.

Engro Chemical

Shirazi Investment

Fauji Foundation

Saif Group

Liberty Mills

Descon Group

Gul Ahmed

Tapal Family

Saigols

HUBCO

Lucky Group

Siddiquesons Ltd.

International Power (UK)

Congen Technology

El Paso (USA)

Tenaska (USA)

Mitsui (Japan)

Xenel (KSA)

TNB (Malaysia)

AES Corporation

AEB

IFC

Oman Oil

DEG Germany

GE Capital

GDF Suez (France)

KOSEP, Korea

K-Water

CMEC, China

Shanghai Electric Group Co.

Power Construction Corporation, China

China Power International Holding Company.

China Ghezouba Group

China Three Gorges

National Bank of Pakistan

Habib Bank Ltd.

United Bank Ltd.

Muslim Commercial Bank

Allied Bank Ltd.

Askari Bank Ltd.

Faysal Bank Ltd.

Meezan Bank Ltd.

Bank Al Habib

Habib Metropolitan Bank Ltd.

The Bank of Punjab

Soneri Bank Ltd.

NIB Bank Ltd.

Pak Oman Investment Co.

Pak China Investment Co.

Saudi Pak Industrial and Agricultural Investment Co.

IFC

World Bank

ADB

IDB

US Exim Bank

AIDEC

CDC (UK)

EDC (UK)

SACHE (Italy)

ANZ Banking Group (Australia)

ABN Amro Bank

Jexim (Japan)

Bank of Tokyo Mitsubishi

Toronto-Dominion Bank

DEG (Germany)

FMO (Netherlands)

PROPARCO (France)

SWEDFUND (Sweden)

K-EXIM

EXIM Bank of China

Industrial and Commercial Bank of China

China Development Bank

7

INVESTORS AND LENDERS PARTICIPATING IN PRIVATE POWER PROJECTS

In the peak summer months, electricity demand-supply gap reaches up to

6000 MW resulting in load-shedding of up to 8-16 hours per day

WAPDA (NTDC) Power Planning has projected a demand of 31757 MW by

the year 2020

Even if the maximum capability of 18477 MW is assumed, country would

need additional 13310 MW (net) by the year 2020, requiring an investment

of $15 billion

The government is looking towards private sector to bring additional

generation on coal, hydro and renewable energy on fast track basis

In order to encourage private sector, the government has been issuing

various policies/ guidelines from time to time in the past at both federal

and provincial levels

PAKISTAN POWER SECTOR –

CURRENT SCENARIO

8

POWER GENERATION POLICY 2015

SALIENT FEATURES/ INCENTIVES (1/2)

9

PPIB /relevant entities in the Provinces / AJ&K / GB will provide a

one-window facility for implementation of projects under the Policy.

Exemption from Corporate Income Tax, Turnover Tax, Withholding Tax

and Sales Tax, only 5% concessionary Import Duty on plant &

equipment not manufactured locally

GOP Guarantees obligations of power purchaser & provinces

GOP provides protection against Political Force Majeure, Change in Law

and Change in Duties & Taxes

For Hydro Power Projects; WUC will be paid @ Rs. 0.425/kWh to the

province where the project is located.

Power Purchaser to bear Hydrological Risk for Hydro projects

POWER GENERATION POLICY 2015

SALIENT FEATURES / INCENTIVES (2/2)

10

Attractive Return on Equity (ROE) provided by the Regulator

To mitigate high underground geological risk, long construction period

and environmental sensitivities following tariff re-openers are provided

by NEPRA

Cost Escalation in Civil and Cost Variation for E&M works

Resettlement Cost

Cost variation due to Geological Conditions limited to Tunnel Area

Tariff indexation for inflation (US CPI & Pak WPI)

Government ensures conversion of Pak Rupee & remittance of foreign

exchange for project-related payments

HYDRO BASED POWER PROJECTS

11

Un-Tapped

POTENTIAL & STATUS OF HYDROPOWER DEVELOPMENT IN PAKISTAN

TOTAL =60000 MW

OPERATION=7013 MW

Under Process

(PPP)

12

24736 MW

21125 MW

6450 MW

7291 MW

193 MW

1 MW

HYDROPOWER POTENTIAL

Total =59796 MW

13

LOCATION OF HPPs ON JEHLUM RIVER

Mangla PH

N

Garhi Habibullah

640 MW Mahl HPP

640 MW Azad Pattan HPP 720 MW

Karot HPP

500 MW Chakothi Hattian

HPP

PUNJAB

Khyber Pakhtunkhwa

AJ&K

147 MW Patrind HPP

Mah

l Rive

r

14

Gulpur

KOTLI

Gulpur HPP

Sehra HPP

PROJECTS ON POONCH RIVER IN AJK

SEHRA 130 MW KOTLI 100 MW GLPUR 100 MW RAJDHANI 132 MW Total= 462 MW

15

102 MW Batta Kundi HPP

188 MW Naran HPP

870 MW Suki Kinari HPP

300 MW Balakot HPP

Balakot

Naran

Kaghan

Paras

147 MW Patrind HPP

PROJECTS ON

KUNHAR RIVER IN KP

Bata Kundi 102 MW Naran 188 MW Suki Kinari 870 MW Balakot 300 MW Patrind 147 MW Total= 1607 MW

16

ATHMUQAM

Kundal Shahi

Dudhnial

Sharda

Nara

Kaghan

Halmat

Toabat

Janawai

Jagran

Panjgran TITHWAL

NEELUM RIVER

NEELUM VALLEY- MAJOR HYDEL SCHEMES

Legend

Dudhnial 800 MW Athmuqam 350 MW Ashkot 300 MW N-J 969 MW Total= 2419 MW

17

18

PPIB will shortly advertise following two hydro IPPs

through national/international print media :

80 MW Neckerdim Paur Hydropower Project, in

Chitral, KP

197 MW Kalam Asrit Hydropower Project, KP

NEW INVESTMENT OPPORTUNITY

19

Project requiring support in areas of Equity Participation, EPC

Contract, O&M Contract, Electro-Mechanical Equipment Supply and

Lending/ Financing:

548 MW Kaigah Hydropower Project, Indus River, Kaigah, KP

NEW INVESTMENT INITIATIVES

(In progress private sector Hydel Projects)

COAL BASED POWER PROJECTS

20

Pakistan’s Coal Reserves

Sindh 185,457 million tonnes

Punjab 235 million tonnes

Baluchistan 217 million tonnes

NWFP 90 million tonnes

Azad Kashmir 9 million tonnes

Thar

21

COAL BLOCKS AVAILABLE AT THAR, SINDH

22

Block Allocated Investors

Exploring Agency

Classification System

Mining Lease Issued

Total Drill Holes

Area (km2)

Resources (million

tons)

VII DRD USGS 52 100 2,175

VIII DRD USGS 58 100 3,035

IX DRD USGS 50 100 2,862

X DRD JORC 45 100 2,870

XI DRD USGS

31 101.46 1,612.05

JORC 1,585.79

XII DRD USGS

31 100.74 2,345.60

JORC 2,046.50

Total 1,432 39,780

Source: TCEB

DETAILS OF COAL BASED PRIVATE POWER PROJECTS

SINDH

Sr. No Project Name / Sponsors Capacity

(MW) Location Coal Type

*Estimated Coal Consumption (Million Tons

Per Annum)

1 1,320 MW Imported Coal based Power Project at Port Qasim, Karachi by Sinohydro Resources Limited and Al Mirqab Capital

1320 Port Qasim, Karachi Imported Coal 5.610

2 1320 MW Thar Coal based Power Project at Thar Block - I by Sino Sindh Resources Limited / Shanghai Electric

1320 Thar Block - I, Sindh Thar Coal 5.950

3 660 MW Thar Coal based Power Project at Thar Block - II by Engro Powergen Thar Limited

660+660 Thar Block - II,

Sindh Thar Coal 2.805

4 660 MW Imported Coal based Power Project at Port Qasim, Karachi by Lucky Electric Power Company Limited

660 Port Qasim, Karachi Imported Coal 2.805

5 350 MW Imported Coal based Power Project at Port Qasim, Karachi By Siddiqsons Limited

350 Port Qasim, Karachi Imported Coal 1.488

6 1320 MW Thar Coal based Power Project at Thar Block-VI by Thar Electricity (Pvt) Ltd. (Oracle Coal fields Plc)

1320 Thar Block-vi Thar Coal 5.610

7 330 MW Thar Coal based Power Project by Hub Power 330 Thar Block - II,

Sindh Thar Coal -

8 330 MW Thar Coal based Power Project by Thal Power 330 Thar Block - II,

Sindh Thar Coal -

PUNJAB

1 1,320 MW Imported Coal based Power Project at Sahiwal by Huaneng Shandong Ruyi (Pakistan) Energy (Private) Limited

1320 Sahiwal, Punjab Imported Coal 5.610

2 163 MW Imported Coal Power Project at Arif Wala, Punjab by

Grange Power Limited 163 Arif Wala, Punjab Imported Coal 0.6375

BALOCHISTAN

1 1,320 MW Imported Coal based Power Project at HUB Balochistan by Hub Power Company Limited

1320 HUB, Balochistan Imported Coal 5.610

Grand Total 9753 MW Total Coal Consumption 37.4005

*Coal consumption estimated @ .00425 Million Ton per Annum per MW as per feasibility study conducted by China Machinery Engineering Corporation on coal mines of Salt Range, Punjab

*Actual coal consumption may significantly vary with heat rate, conversion efficiency, quality of coal and technology of the power plant

23

DETAILS OF PRIVATE POWER PROJECTS INCLUDED IN

CHINA-PAKISTAN ECONOMIC CORRIDOR

Sr.

No Project Name / Sponsors

Capacity

(MW) Location Fuel Type

COAL BASED POWER PROJECTS UNDER CPEC

1

1320 MW Imported Coal based Power Project at Port Qasim,

Karachi by Sinohydro Resources Limited and Al Mirqab

Capital

1320 Port Qasim, Karachi Imported Coal

2 1320 MW Thar Coal based Power Project at Thar Block - I by

Sino Sindh Resources Limited / Shanghai Electric 1320 Thar Block - I, Sindh Thar Coal

3 660 MW Thar Coal based Power Project at Thar Block - II by

Engro Powergen Thar Limited 660+660 Thar Block - II, Sindh Thar Coal

4 1320 MW Thar Coal based Power Project at Thar Block-VI by

Thar Electricity (Pvt) Ltd. (Oracle Coal fields Plc) 1320 Thar Block-VI Thar Coal

5 1320 MW Imported Coal based Power Project at Sahiwal by

Huaneng Shandong Ruyi (Pakistan) Energy (Private) Limited 1320 Sahiwal, Punjab Imported Coal

6 1320 MW Imported Coal based Power Project at HUB

Balochistan by Hub Power Company Limited 1320 HUB, Balochistan Imported Coal

Total (Coal) 7920

24

HYDROPOWER BASED POWER PROJECTS UNDER CPEC

1 870 MW Suki Kinari Hydropower Project

870

River Kunhar, KP

Run-of-the River

2 720 MW Karot Hydropower Project

720

River Jhelum, Punjab

Run-of-the River

3 1100 MW Kohala Hydro Power Project

1100

River Jhelum, AJ&K

Run-of-the River

Total (Hydropower) 2690

Grand Total (Coal + Hydropower) 10610

R-LNG PROJECTS

25

NEW INVESTMENT INITIATIVES

(RLNG Projects)

26

More than 3600 (2 x 1200) MW Power Generation Projects based on R-

LNG, to be commissioned, 2400 MW open cycle by May 2017; completion

of 3600 MW early 2018:

National Power Parks Management Company Limited (NPPMCL) under

Ministry of Water & Power is in the process of developing two (02) R-

LNG based power plants each of around 1223 and 1230 MW at Balloki

and Haveli Bahadur Shah respectively, in the province of Punjab

The Government of Punjab is developing a 1180 MW R-LNG based

power project at Bhikki, Sheikhupura through a special purpose

company with the name and title of Quaid-e-Azam Thermal Power

(Pvt.) Ltd. (QATPL)

Recently, NEPRA has announced Upfront Tariff for the R-LNG based power

plants

PPIB’s PORTFOLIO OF UPCOMING PRIVATE POWER

PROJECTS (IPPs)

Description/ Year

Hydel Coal Gas Total

(MW)

No. of

Projects MW No. MW No. MW No.

2017 150 1 3,300 3 0 0 3,450 4

2018 0 0 2,640 2 0 0 2,640 2

2019 232 2 2060 5 0 0 2,292 7

2020 1,360 2 0 0 0 0 1,360 2

2021 870 1 0 0 0 0 870 1

2022 2,033 5 0 0 120 1 2,153 6

2023 1,690 2 0 0 0 0 1,690 2

2024 1,088 4 0 0 0 0 1,088 4

2025 80 1 0 0 0 0 80 1

Grand Total 7,503 18 8,000 10 120 1 15,623 29

27

TRANSMISSION LINE PROJECTS

28

Government has recently announced an investor-friendly

Transmission Line policy which entails:

Award of Projects through ICB and Upfront Tariff on BOOT

basis

Policy covers Transmission Line & Grid Station projects of

220 kV voltage level and above (EHVAC & HVDC)

Exemption from Corporate Income Tax for first ten years

including turnover rate tax and withholding tax on imports

Standardized Security Package (IA & TSA)

One Window facility by PPIB

TRANSMISSION LINE PROJECTS

(INVESTMENT OPPORTUNITIES)

29

Investors are welcome to avail investor

friendly profitable business opportunities

in Pakistan’s Power Sector

30

31