Power Construction Corporation of China and Oracle Power Company plan to develop 1GW photovoltaic project in Pakistan
Recently, Oracle Power PLC announced that it has signed a cooperation agreement with Power Construction Corporation of China to jointly develop a 1GW solar independent power generation project (Thar Solar Project).
The agreement includes the following components:
1.Power Construction Corporation of China will support Oracle in conducting a comprehensive feasibility study, including surveys, surveys and other studies for the Thar Solar Project
2.Oracle to develop partnership and arrange financing for Thar Solar Project – Power Construction Corporation of China will also assist in arranging financing if required
3.Oracle to coordinate ongoing talks with Sindh and Pakistani governments
4.Power Construction Corporation of China will coordinate and cooperate with the Chinese government
The project is located in Thar Block Ⅵ, Sindh Province, Pakistan. Oracle Power, through its subsidiary Sindh Carbon Energy Ltd, holds a 30-year mining lease for Thar VI block, which is located in the desert of southeast Sindh Province, Pakistan, approximately 250km from the proposed site of Oracle Power’s Green Hydrogen Project.
With a total area of 66.1 sq km, Block 6 of Thar, located within the wider Thar Desert, contains the sixth largest lignite resource in the world with over 175 billion tonnes and has the potential to be one of Pakistan’s most valuable assets if developed for power, gas, liquids and domestic and regional sales. In the development project of Thar Sixth District, Power Construction Corporation of China and Oracle Corporation have long had project cooperation. In June 2017, the 1,320 MW Thar Mine Port Oracle Power Plant and Open Pit Project was promoted to the China-Pakistan Economic Corridor (CPEC) priority project list. In November 2017, Oracle signed a Memorandum of Understanding (MoU) with Sichuan Provincial Investment Group Co., Ltd. (SCIG) and Power China International Group Co., Ltd. to invest in, set up, construct, own and operate the coal-fired power plant. The memorandum of understanding stipulates that the project will be funded by the Chinese bank in cash, and it is proposed that China Energy Engineering Group Southern Construction Investment Co., Ltd, Power Construction Corporation of China and Oracle will hold 78%, 10% and 12% of the equity of the project respectively. In 2021, the project began construction. So far, the project is progressing smoothly and has entered the LOI stage, and is expected to start commercial operation within this year.
After the international community signs the COP26 agreement in Glasgow in October 2021, international financial institutions are encouraging investment in renewable energy and green energy plants. In addition, nearly 10,000 MW of solar power generation will be implemented in phases under the Pakistani government’s 2022 Fast-Track Solar PV Programme.
The electricity generated by solar installations could be integrated with the national grid to meet the country’s urgent need for renewable energy, or sold to a grid of private distributors. The same power could also be used to reduce the carbon footprint of the coal power projects currently in operation in Thar District I and II.
The preliminary technical plan of Oracle 1GW solar energy project proposes that the solar power station will be developed on the land outside the mining area, covering an area of less than 25% of Thar Block Ⅵ. Its power generation comes from the Thar Desert, which is a completely renewable resource. The solar farm will be deployed outside the potential construction and impact area of any future coal-related projects.
The Ministry of Energy of the Sindh Provincial Government has granted a conditional license to Oracle Corporation to develop a solar power plant in Thar Block 6 subject to final approval by the Sindh Provincial Cabinet. Approximately 1.5 million photovoltaic panels are expected to be installed, each with an installed capacity of 655 watts, generating approximately 1.7 billion kWh of electricity per year.
Commenting on the proposed development of the Thar Solar Project, Naheed Memon, Chief Executive Officer of Oracle, said:
“The proposed development of the Thar Solar Project provides Oracle with the opportunity to not only develop a sizeable renewable energy project in Pakistan, but also to bring a long-term and sustainable business to our Thar Block VI asset. This development, along with the significant progress being made with our Green Hydrogen project in the Sindh Province, underpins Oracle’s core strategy of focusing on the production of green energy. We look forward to working closely with our partners to swiftly establish ourselves as front runners in the production of renewable power and green energy solutions in Pakistan and in the broader region.”
Over the years, PowerChina and Oracle have worked closely on the development of Thar Block 6 energy in Pakistan and achieved great results. The research and implementation of Thar Block 6 solar power generation project, on the one hand, is conducive to the further development of renewable energy in the Thar Desert, effectively improving the local energy situation and improving the living standards of local residents. On the other hand, it is conducive to the in-depth development of China-Pakistan Economic Corridor and the further deepening of cooperation between PowerChina and Oracle to achieve win-win results.
Power Construction Corporation of China and Oracle Power Company plan to develop 1GW photovoltaic project in Pakistan