Pakistan to finance Nandipur power project through local banks

Pakistan will borrow Rs23 billion from domestic banks for the 425-megawatt Nandipur power project.

This is after a consortium of foreign banks backed out of its financing commitment.

According to a senior government official, the government will take Rs23 billion in loans from banks against sovereign guarantees compared to the total financing requirement of Rs57 billion.

The consortium, comprising BNP Paribas and Export-Import Bank of China, had signed a Buyer Credit Facility Agreement worth $150.151 million with Northern Power Generation Company Limited for construction of the combined cycle power project at Nandipur.

Arrangements have also been finalised with the Chinese contractor to push ahead with the project. The main engineering, procurement and construction (EPC) contractor is a leading Chinese company, Dongfang Electric Corporation, with a sub-contractor GE France.

Earlier, the Chinese contractor had served a notice on the government, asking it to scrap the contract for the project because of delay in work. During negotiations, the Chinese company sought compensation for the losses it suffered during the two years when the machinery remained stuck at the port.

The machinery worth $85 million has been awaiting clearance for quite a long time. “Now, the issue with the Chinese contractor has been settled and it has agreed to carry out physical work if funds are released,” an official said.

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