South Asia: Best Individual BRI Project or Initiative in the Region 2017
Thar Engro Coal Power Project
Habib Bank (HBL) was quick to see the potential in China’s Belt and Road Initiative. It was mandated as an account bank on a host of early BRI projects, helping to finance and develop the deep-water port at Gwadar, as well as the $1.3 billion, two-stage development of the Karakoram Highway between China and Pakistan, and a clutch of highways, power plants, hydropower facilities and wind farms.
But HBL’s role in the Thar Engro Coal Power Project, which wins Asiamoney’s award for best BRI-related project or initiative in south Asia, stands out for two very good reasons.
The first is cost. This is an enormous and integrated scheme, and an important part of the $46 billion China-Pakistan Economic Corridor. It involves the construction of a $2 billion electric plant in the town of Islamkot, in Sindh province. A $1.7 billion high-voltage transmission line, built by China Electric Power Equipment and Technology (CET), will plug the new plant into the national grid.
Habib Bank is chief financial adviser to CET, a subsidiary of State Grid Corporation of China, and mandated lead arranger to the Sindh Engro Coal Mining Company, which is vested with building the power plant.
The second factor is complexity. Pakistan has been trying to get this vast project running for years – and it required lot of handholding with clients new to the country. State Grid and CET previously had negligible experience in Pakistan’s power sector.
There were more debuts: it marked the first time a CPEC project was covered by Sinosure Buyer’s Credit Policy, and is the first high-voltage direct current transmission line ever installed in Pakistan.
HBL was instrumental in the financing documentation review and in creating a landmark framework acceptable to all parties.
The project’s funding closed in December 2016 and is set for completion by 2020.