Lucky Cement to award 660MW power plant contract next month

Lucky Cement to award 660MW power plant contract next month

Lucky Cement is preparing to award a contract to build a 660MW coal-fired electricity generation plant at the country's industrial hub near Karachi.

Negotiations with potential EPC (engineering, procurement and construction) contractors have started and the EPC contract will be concluded during the month of May 2016.

In March, the Pakistan Power Infrastructure Board issued a licence to Lucky Electric Power Company, a subsidiary of Lucky Cement, to build the coal-fired plant at Deh Ghangario, Bin Qasim Town.

The imported coal requirement for the power plant is likely to be handled by the Pakistan International Bulk Terminal (PITB).

Analysts said the project cost will cost around US$1.08bn and would be undertaken with a 25/75 percent debt to equity ratio. Lucky is expected to provide 25 percent of the required investment, with the remaining 75 percent financed by debt from the local financial institutions.

Background
Lucky Cement, the leading cement maker, has a combined production capacity of 7.75Mta and plans to build a new cement plant in the north region of the country to meet growing demand. The panned plant will be the company's third production facility in the country.

The company earlier said that initial work on the new plant worth US$200m was progressing rapidly and it is in talks with the Punjab government to acquisition land for the project. Similarly, it is also in the process of negotiating contract with the equipment suppliers.

Lucky cement also initiated a US$240m plant in the Democratic Republic of Congo in June 2013, which is on track for completion in October 2016.