SINDH Engro Coal Mining Company (SECMC) has signed a Memorandum of Understanding (MoU) with China’s TBEA to jointly develop energy projects in Pakistan. The parties intend to develop coal mining and power projects at the Thar Coalfields in Sindh province.

Tebian Electric Apparatus Stock Co (TBEA) intends to invest equity into SECMC and will assist in raising finance from China. TBEA was the first company in China’s transformer production industry to go public. It is involved in scientific research as well as designing, producing and exporting transformers, wire and cable, high-voltage electric aluminium foil and key solar energy equipment parts.

SECMC’s mining and power projects, under its subsidiary Thar Power Company, are expected to kick-off early in 2014 and will be completed within four years. TBEA wants to enter Pakistan’s energy sector with a long-term vision to develop Thar Coalfields. It agrees that Thar coal is a technically and economically viable indigenous resource for power generation, and will provide a sustainable solution to future energy needs of Pakistan.

TBEA is a key player in China’s power equipment manufacturing industry and, as a turnkey power projects contractor and power equipment manufacturer, has international co-operation in more than 50 countries. It is one of the largest global power transformer suppliers with annual production capacity exceeding 250 million kVA.

SECMC, a joint venture between Government of Sindh and Engro, is the developer of Thar Coal Mining Block-II. Thar coalfields contain the world’s seventh largest coal reserves -estimated at 175 billion tonnes and capable of producing 100,000MW for the next 200 years.

Being indigenous, Thar coal prices are not linked to international energy price movements thus insulating the end consumer from the vagaries of international coal price movements and simultaneously resulting in major foreign exchange savings.

Thar coal also has the advantage of economies of scale, which will result in a progressively lower coal price and predictable electricity price as the mining operation scales up and more power plants are added. At the optimum mine size, Thar Coal will yield a power tariff of less than US$0.06/kWh which will completely change Pakistan’s energy scenario.

The MoU follows a visit by Pakistan’s President Zardari to China in July. He met with TBEA chairman Zhang Xin. After receiving a TBEA report on power contracting projects in Pakistan, President Zardari showed sincere gratitude for the contributions TBEA has made in Pakistan’s economic development, particularly in power supply and transmission. He stated: “You are not only the builder of Pakistan’s economy but also the promoter of traditional friendship between Chinese and Pakistanis.”

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