Oracle Coalfields PLC (AIM:ORCP), the UK energy developer of a combined lignite mineral resource and mine mouth power plant located in the Thar desert in the south-east of Sindh Province, Pakistan (the “Project”), today provides an update to the market of its progress in bringing its project to financial close and an update on operations.
China-Pakistan Economic Corridor / Chinese Partners
As previously announced on 9 January 2017, in a meeting held in Beijing on 29th December 2016, Oracle‘s flagship Block VI project in Thar was elevated to the Priority List of the China-Pakistan Economic Corridor (“CPEC”). The Company is pleased to confirm Oracle’s presence in the recently updated Priority List of energy projects, which can be accessed through official government websites (www.cpec.gov.pk). CPEC was established to support energy and infrastructure projects in Pakistan that are to receive debt and equity funding from Chinese companies and Chinese banks.
Since Oracle’s elevation to the Priority List, the Company has been involved in extensive and detailed discussion with potential Chinese partners. Discussions are now at an advanced stage with Engineering, Procurement and Construction contractors, to construct the mine and the power plant and to provide ongoing operations and maintenance, as well as with potential providers of asset level equity and loan finance for the Project, with the intention that the Project finance will be underwritten by Sinosure, the China Export and Credit Assurance Corporation.
In Pakistan, work has been progressing on various essential elements to bring the Project to financial close:
· The power plant has been registered with the Private Power and Infrastructure Board (“PPIB”) for a plant up to 1,320MW capacity, with initial construction of a 660MW plant at the site.
· The Central Power Purchasing Agency has issued a “Letter of No Objection” for the 660MW power plant and the National Grid has confirmed that power from the project will be accommodated within the planned high voltage transmission line.
· The Government Sindh, Energy Department, has allocated water access of 38 cubic feet per second from its nearly completed pipeline and reservoir. This takes water from the Indus river canal system to the Thar coalfield which will provide sufficient water for power generation for the life of the project.
· The power plant Environmental Social Impact Assessment has been submitted to the Sindh Environmental Protection Agency and a date for its public hearing should be provided shortly.
The Company will make further announcements on the funding package and operational progress of the Project as matters progress.
Shahrukh Khan, CEO of Oracle said:
“As previously stated, the elevation of our flagship asset to the CPEC Priority List is a significant development. Not only does it heighten the Project’s significance within Pakistan, it provides the basis for closing out the Company’s financing arrangements with an assortment of Chinese Banks, Sinosure and Chinese Investors. It also provides valuable support to our objective to move expeditiously to financial close.
Progress also continues to be made simultaneously from an operational standpoint and the Company looks forward to updating the market in the near-term.”
Original RNS here.
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