Latest news with #Thar-based
Business Recorder
14 hours ago
- Business
- Business Recorder
HUBCO shareholders approve $51mn guarantees for Thar-based coal projects
The shareholders of Hub Power Company Limited (HUBCO), Pakistan's largest Independent Power Producer (IPP), have approved the provision of financial guarantees worth up to $51 million to support two of its key Thar-based coal projects, i.e. Thar Energy Limited (TEL) and ThalNova Power Thar (Private) Limited (TN). The IPP disclosed the development in its latest notice to the Pakistan Stock Exchange (PSX). The decision was approved during an extraordinary general meeting (EoGM), held on August 7, 2025, where the company's shareholders passed resolutions authorising guarantees — in the form of standby letters of credit — of up to $31 million for TEL and up to $20 million for TN to cover funding shortfalls through equity and/or subordinated debt. HUBCO proposes $51mn investment in Thar-based coal projects The company has also authorised its top management to negotiate with banks and financial institutions, provide security as required, and execute all necessary agreements and documentation to facilitate the issuance and maintenance of these guarantees. TEL is a 330MW mine-mouth coal-fired power plant located at Thar Block II. HUBCO owns a 60% stake in the company. Meanwhile, TN is also a 330 MW mine-mouth coal-fired power plant established at Thar Block II, Thar Coal Mine, Sindh. HUBCO, through its wholly owned subsidiary, Hub Power Holdings Limited (HPHL), presently holds 38.3% shares in TN. Earlier, HUBCO, in its filing to the PSX, shared that it has already invested approximately $79 million in TEL and $52 million in TN, and both projects operate under the Government of Pakistan's 2015 Power Policy, which offers a 20% return on equity in USD terms.
Business Recorder
16-07-2025
- Business
- Business Recorder
HUBCO proposes $51mn investment in Thar-based coal projects
Hub Power Company Limited (HUBCO), Pakistan's largest Independent Power Producer (IPP), has announced plans to extend its financial support to two of its key Thar-based coal projects i.e. Thar Energy Limited (TEL) and ThalNova Power Thar (Private) Limited (TN), with a combined proposed investment of up to $51 million (approx Rs14.61 billion). The IPP disclosed the development in a notice to the Pakistan Stock Exchange (PSX) on Wednesday, ahead of an Extraordinary General Meeting (EGM) scheduled for August 7, 2025. HUBCO shared that its board has approved special resolutions to extend the Sponsor Support Contribution Letters of Credit (SSC LCs) for both projects. The company seeks these extensions to address funding requirements and potential debt servicing shortfalls as the projects approach critical operational milestones. Pakistan's largest IPP HUBCO posts Rs20.3bn profit in 1QFY25 despite revenue dip 'The purpose of the extended tenor of the SSC LC would be to cover: (i) any LDs determined to be payable by TN under its amended PPA on account of payment of High Voltage Direct Current (HVDC) charges under certain conditions. Such charges levied by CPPA-G have been disputed by TN, however, following conclusion or resolution of this dispute, any payable amount would remain a sponsor liability (in proportion to its share under the SSA); and (ii) shortfall in debt servicing, pursuant to the conditions stipulated in the SSA (in proportion to its share under the SSA). In such case, the Sponsors would be required to inject such funds, either in the form of equity and / or subordinated debt,' read the notice. As per the notice, HUBCO seeks shareholder approval to provide or extend a guarantee of up to $31 million in favour of Thar Energy Limited (TEL), a 330MW mine-mouth coal-fired power plant located at Thar Block II. HUBCO owns a 60% stake in TEL. Similarly, the IPP intends to offer a further $20 million in guarantees to ThalNova Power Thar (Private) Limited (TN), a 330 MW mine-mouth coal-fired power plant established at Thar Block II, Thar Coal Mine, Sindh. HUBCO, through its wholly owned subsidiary, Hub Power Holdings Limited (HPHL), presently holds 38.3% shares in TN. The guarantees will be structured either as equity or subordinated debt. HUBCO stated that the tenor of the support will be extended until January 2034 for TEL and July 2034 for TN, or until the end of each project's loan term, whichever is later. The IPP was of the view that achieving completion for both projects marks a significant milestone that would allow them to generate distributable surplus and pay dividends. The company shared that it has already invested approximately $79 million in TEL and $52 million in TN, and both projects operate under the Government of Pakistan's 2015 Power Policy, which offers a 20% return on equity in USD terms.
