Engro Qadirpur NGCC Power Project

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Engro Energy Ltd. was established as a project company in order to build, own and operate a greenfield, 227 MW combined cycle gas-fired power plant adjacent to Qadirpur Gas Field, near the town of Ghotki, in Sindh Province. On Oct. 29, 2007, Engro Energy Ltd. signed an Implementation Agreement (IA) with Pakistan's Private Power and Infrastructure Board (PPIB) for the establishment of a 227 MW gas-fired power plant. The project was awarded on an unsolicited basis following a period of direct negotiations, in which Engro Energy Ltd. proposed that low heating valued permeate gas, which at the time was being flared at the nearby Qadirpur Gas Field, could be used as the fuel source for the Engro Power Project. Engro Energy Ltd. was a wholly-owned subsidiary of Engro Chemical Pakistan Ltd. Subsequently, the National Transmission and Distribution Company concluded a 25-year power purchasing agreement (PPA) with Engro Energy Ltd. The project held a fuel supply contract with SNGPL signed April 2008. According to PPIB, the US$205 million project reached financial close in April 2008, on the basis of a 75/25 debt-equity split. Of the US$51.25 million in equity, IFC provided US$3 million. Of the US$153.75 million in debt, IFC provided US$66 million in the form of an 'A' loan, which was signed on Dec. 19, 2007. The remaining debt (US$87.75 million) was provided by DEG, FMO, OFID, Proparco and Swedfund. The project also held a GOP guarantee signed April 2008. The project became operational in March 2010. Sources: IFC (Summary of Proposed Investment), Private Power and Infrastructure Board, Project Finance International, Pakistan Daily Times, Engro Chemical Pakistan Ltd. http://engro.com/our-businesses/engro-power-gen-limited/