Sheikhupura power station
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Sheikhupura power station is a power station under construction in Sheikhupura, Punjab province, Pakistan.
Location
Table 1: Project-level location details
| Plant name | Location | Coordinates (WGS 84) |
|---|---|---|
| Sheikhupura power station | Sheikhupura, Sheikhupura, Punjab province, Pakistan | 31.6526, 74.1808 (approximate) |
The map below shows the approximate location of the power station.
Project Details
Table 2: Unit-level details
| Status | Fuel(s) | Capacity (MW) | Technology | Start year |
|---|---|---|---|---|
| construction[1] | coal: subbituminous, bioenergy: agricultural waste (solids) | 31.5 | subcritical | 2024 (planned) |
Table 3: Unit-level ownership and operator details
| Owner | Parent |
|---|---|
| Mughal Energy Ltd [100%] | Mughal Iron & Steel Industries Ltd [100.0%] |
Project-level captive use details
- Captive industry use (heat or power): power[1]
- Captive industry: Iron & Steel[1]
- Non-industry use: power[1]
Project-level coal details
- Coal source(s): domestic and imported
Background
In July 2014, the chief minister of Punjab said the government was planning to build 110 MW coal power plants (2 x 55 MW) near industrial load centers in seven big cities: Sheikhupura, Faisalabad, Gujranwala, Sialkot, Gujrat, Multan, and Lahore.[2]
In July 2015, Mughal Group Industries said it planned a 55 MW coal-fired power plant in Sheikhupura with an estimated cost of US$140 million. The group intended to implement the project through a special purpose vehicle named Mughal Energy Limited, which approached the National Electric Power Regulatory Authority (Nepra) seeking a generation license.[3]
The project would be aimed at meeting the 39 MW power requirements of Mughal Steel Mills, the second largest steel manufacturing concern in Pakistan. It would use circulating fluidized bed (CFB) technology, 70 percent imported coal, and recirculating cooling technology supplied from ground water. A special purpose vehicle named Mughal Energy Limited would build the project, estimated at US$141.7 million and financed withy 75:25 debt to equity. It would have a gross capacity of 55 MW and net capacity of 49 MW, with 29 MW used by Mughal Steel, 10 MW dedicated to grid dispatch, and 10 MW to surplus power dispatch.[4]
There were no further updates on the project until June 2019, when it was reported that Mughal Energy was again planning the 55 MW captive coal plant at a proposed investment of US$137 million. According to a company document: "Given the prevailing energy shortages and the ever-increasing cost of electricity, the board of Mughal Group of Industries is assessing and evaluating the proposal of setting up a coal power generation facility."[5]
Generation License (Feb. 2021)
On February 10, 2021, NEPRA granted a generation licence to the 55 MW project located at 17-Km on Lahore-Sheikhupura Road, Tehsil & District Sheikhupura in the Province of Punjab. The licence was valid through June 30, 2023.[6]
Licensee Proposed Modification (Oct. 2021): Capacity reduction
In October 2021, the sponsor sought a capacity modification: "Installed Generation capacity of facility is being proposed to be changed to 36.5 MW consisting of 2 Steam Turbines (31.5 MW & 5 MW) instead of the earlier capacity envisaged to be 55.00 MW (having 1 x 55.00 MW Steam Turbine)."[7][8]
In May 2022, the Modification in Generation license was approved by the National Electric Power Regulatory Authority.[9] The license is for 30 years starting from Commercial Operation Date (COD).
Construction Update
As of December 2022, as per PACRA rating report, it was reported that the plant equipment was already at the site and the expected commissioning date was 15 months from the construction start date, expected to start in December 2022. The plant was procured and sourced from a German company. The equipment included boilers, generators and 2 turbines of 31.5 MW and 5 MW that had already reached the installation site. The Company assigned local contractors for the installation and testing.[10]
The off take risk would be addressed with finalization of a longterm power purchase agreement with Mughal Iron & Steel Industries Limited. The company had yet to finalize the coal supply agreement for sourcing of coal. The plant was set to be operated on both local and imported coal.[10]
Reporting from November 2023 stated that Mughal Energy Limited had become a wholly-owned subsidiary of Mughal Iron & Steel Industries Limited.[11]
In December 2023, an updated PACRA rating report for Mughal Energy Limited indicated that construction on the power station had started in October 2023 and commissioning was expected within 18 months.[12] The project was now described as a "hybrid captive power plant" that would reportedly run on coal, bagasse, and cotton sticks.[12][13]
Financing
The project was estimated to cost US$137 to 141.7 million. However, the February 2021 license listed a reduced figure: the 55 MW project was expected to cost about US$ 74.25 million to be financed through a combination of debt (75% of the total cost of project) and equity (25% of the total cost of project). The license stated "a number of financial institution/commercial banks have shown their willingness to finance the debt portion of the project.“[6]
As of December 2022, the total estimated cost of the revised project was PKR 6.5bln (US$29 million). It was set to be financed through expected debt to equity mix of 60:40. The company had already procured the plant and land for plant site through equity injected by the sponsors. The debt financing would be utilized towards installation and testing of the plant. Mughal Iron & Steel Industries Limited had approved issuance of corporate guarantee of PKR 6bln in favour of banks on behalf of the Company to procure financing for a period of 5 years. Debt was set to be raised through local banks. There were offers from Pak Libya and Pak Brunei worth PKR 450mln and PKR 500mln to fund the project. The remaining borrowing arrangements were underway.[10]
As of December 2023, it appeared that financing has not yet been closed. Mughal Iron & Steel Industries Limited approved issuance of corporate guarantee of PKR 6bln in favour of banks on behalf of MEL for the purpose of availing financing for a period of 5 years.[12]
As per rating report from July 2024, Mughal Energy was planning to issue PKR 2.5 billion Sukuk. Estimated project cost was still PKR 6.5 billion with 60% / 40% debt/equity structure.[14]
Environmental concerns
Sheikhupura, one of the country’s major industrial cities, is plagued by serious environmental pollution concerns. For example, measures do not effectively address the toxic smoke emanating from factories and brick kilns. Sheikhupura Deputy Commissioner Tariq Mehmood Bukhari has previously launched anti-smog campaigns to attempt to address the public health situation.[15]
Opposition: 2014 court order
The Punjab government in Sheikhupura allotted 9,000 acres of land for the project. However, local environmentalists filed a court plea against the power plant, citing increases in environmental pollution. Since the District Coordination Office in charge of the Sheikhupura plant admitted that the environmental hazards had not been fully assessed, the Lahore High Court halted the power plant project.[16]
Articles and Resources
References
- ↑ 1.0 1.1 1.2 1.3 (PDF) https://web.archive.org/web/20240125153735/https://www.pacra.com/summary_report/RR_2459_12356_01-Dec-23.pdf. Archived from the original (PDF) on 25 January 2024.
{{cite web}}: Missing or empty|title=(help) - ↑ "Scaling down: Small coal power plants to be set up in seven cities says CM," The Express Tribune, July 28, 2014
- ↑ "Mughal Steel To Setup Coal-Fired Plant In Sheikhupura," Wish Stocks, July 13, 2015
- ↑ "Generation License Application of Mughal Energy Limited," submitted to National Electric Power Regulatory Authority, April 22, 2015
- ↑ "Mughal Steel plans $137 million coal-fired power plant," Pakistan Today, June 23, 2019
- ↑ 6.0 6.1 "Grant of Generation Licence No. SGC/152/2021, Mughal Energy Limited (MEL)," National Electric Power Regulatory Authority (NEPRA), February 10, 2021
- ↑ "Application for Licensee Proposed Modification (LPM)," Mughal Energy Limited, October 18, 2021
- ↑ "MUGHAL Sought Reduction In Electricity Generation License Due To Lower Energy Requirements: NEPRA," Augaf, November 15, 2021
- ↑ "LAG-454 GL Mughal Energy," National Electric Power Regulatory Authority, May 25, 2022
- ↑ 10.0 10.1 10.2 "Mughal Energy Limited Rating Report" (PDF). pacra.com. December 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Mughal Iron & Steel Industries completes acquisition of energy subsidiary," Business Recorder, November 30, 2023
- ↑ 12.0 12.1 12.2 "Mughal Energy Limited Rating Report," The Pakistan Credit Rating Agency Limited, December 1, 2023
- ↑ "MUGHAL has successfully achieved commissioning for its copper expansion project," Trade Chronicle, November 24, 2023
- ↑ "Rating Report - Mughal Energy Limited" (PDF). vis.com.pk. July 2024.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Environmental pollution grips Sheikhupura," The Express Tribune, October 20, 2019
- ↑ “Lahore High Court cease coal power project in Sheikhupura,” SteelGuru Power News, May 9, 2014 (archive unavailable)
Additional data
To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.
