Foundation Power Company Daharki

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On August 31, 2007, Foundation Power Company Daharki Ltd (FPCDL) signed an implementation agreement with Private Power and Infrastructure Board (PPIB) of the Government of Pakistan to build, own, operate and maintain a 175 MW natural gas based power plant in the city of Daharki, Sindh province. Foundation Power Company Daharki was owned by Fauji Foundation [Pakistan, 100%]. This power project was to be implemented under the Policy for Power Generation Projects 2002 that clearly laid out the incentives and regulatory regime for private investments in power generation. Prior to financial close, FPCDL had entered into formal agreement with PPIB, power purchase agreement with the the Pakistan Water and Power Development Authority (WAPDA). According to the 2002 Policy for Power Generation Projects, projects were awarded to the bidder who submitted the lowest tariff. Further information on how this project was awarded to FPCDL was not available from public sources. The total cost of this project was estimated at $200 million. The project reached financial closure in September 2007 with the signing of the financial closure documents between Foundation Power Company and the Private Power and Infrastructure Board. The project was to be financed 75% through a US $150 million loan syndication led by a consortium comprising ABN Amro Bank, Askari Bank and Bank Alfalah. The Asian Development Bank (ADB) provided a US$44 million partial credit guarantee. In addition, the ADB provided US$2.75 million in equity financing. The power project was expected to start its commercial operation by October 2009, but, ti became operational in May 2011 according to PPIB website.