Oracle Coalfields reports solid progress at Thar project

Oracle Coalfields, the 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, updated the market on its progress in bringing its project to financial close on Thursday, as well as an update on operations.

The AIM-traded firm said that, as previously announced on 9 January, in a meeting held in Beijing on 29 December 2016, Oracle's flagship Block VI project in Thar was elevated to the Priority List of the China-Pakistan Economic Corridor.

It said it was pleased to confirm Oracle's presence in the recently-updated Priority List of energy projects of the CPEC, which was established to support energy and infrastructure projects in Pakistan that were to receive debt and equity funding from Chinese companies and Chinese banks.

Since Oracle's elevation to the Priority List, the company said it had been involved in “extensive and detailed” discussion with potential Chinese partners.

Discussions were said to now be 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, Oracle said work had been progressing on various essential elements to bring the project to financial close

The power plant had been registered with the Private Power and Infrastructure Board for a plant up to 1,320MW capacity, with initial construction of a 660MW plant at the site.

Oracle said the Central Power Purchasing Agency had issued a ‘Letter of No Objection’ for the 660MW power plant and the National Grid had confirmed that power from the project would be accommodated within the planned high voltage transmission line.

The Government of Sindh Energy Department had also allocated water access of 38 cubic feet per second from its nearly-completed pipeline and reservoir.

That took water from the Indus river canal system to the Thar coalfield, the board said, which would provide sufficient water for power generation for the life of the project.

The power plant environmental social impact assessment had been submitted to the Sindh Environmental Protection Agency, and a date for its public hearing should be provided shortly.

Oracle said it would make further announcements on the funding package and operational progress of the project as matters progressed.

“As previously stated, the elevation of our flagship asset to the CPEC Priority List is a significant development,” said CEO Shahrukh Khan.

“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.”

Khan said it also provided “valuable support” to the company’s 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.”