BNU

completed

The 586 MW Uch Power Station (“Uch-I”), owned and operated by Uch Power (Private) Limited (“UPL”), an IFC client, has been in operation since 2000. In March 2007, the Government of Pakistan (“GOP”) through the Private Power and Infrastructure Board (“PPIB”) requested UPL to submit a bid for a capacity expansion to the existing plant. The expansion was designed to utilize the supply of indigenous gas in the Uch Gas Field (“UGF”) and to increase the supply of low cost power to the country. UPL proposed a 404 MW combined cycle expansion project (“Uch II” or the “Project”) on a Build-Own-Operate (“BOO”) basis. All energy that would be produced by the Project would be sold to the National Transmission and Dispatch Company (“NTDC”) under a 25-year Power Purchase Agreement, backed by a GOP Guarantee. An Implementation Agreement would be signed prior to financial close that would entail the GOP’s support for the project and would also lay out the rights and obligations of all parties. The proposed expansion will be structure as a standalone Independent Power Plant (“IPP”) and will be built on the site of the first plant, utilizing the available vacant land, and will use some of the existing physical and management infrastructure. The project will use the indigenous gas that is available in the UGF and is being used by the first plant. In addition to the infrastructure, the project will benefit from synergies with the existing plant in the form of a shared management team as well as common utilization of O&M resources and administrative staff. The synergies are expected to result in a shorter construction period as well as reduced overall project costs which would result in a more competitive tariff for the project. Similar to the operating 586 MW Uch-I plant, the Project is expected to be one of the lowest cost producers of power in the country and would be in line with IFC’s strategy to support the development of low cost thermal power and help improve sector operating costs.