Active Mixed AidData Chinese Aid

[IPP] China Eximbank pledges to provide USD 129 million loan for Thatta 100 MW Wind Power Generation Project

$128.99M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Norinco International Thatta Power (Pvt.) Limited
Country	Pakistan
Start Date	Aug 31, 2017
End Date	Feb 20, 2033
Duration	5,652 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`72708`

Grant Description

[IPP] China Eximbank pledges to provide USD 129 million loan for Thatta 100 MW Wind Power Generation Project In 2015, China Eximbank signed a letter of intent pledging to provide a USD 128,988,000 loan to Norinco International Thatta Power (Pvt.) Limited (NITPPL) for the Thatta 100 MW Wind Power Generation Project in Jhimpir Region of Sindh Province in Pakistan.

📋 Loan / Grant Terms

💰 Loan Amountwas finalized

📅 Maturity15 years

⏳ Grace Period2 years

💹 Interest Rate5.1%

It is unclear whether China Eximbank ever formally committed these funds.

This USD 161,235,000 project was originally supposed to be funded with a debt:equity ratio of 70:30, but Pakistan's National Electric Power Regulatory Authority (NERPA) revised the ratio to 80:20. NITPPL would cover the equity component and expected China Eximbank to cover the entire debt component.

According to NITPPL's generation license application signed in February 2016, the tentative financial close date was August 31, 2017 and construction would start in mid-July 2016.

Under the terms of the contract, construction will be completed in 18 months and the commercial operations date ("COD") would be December 31, 2017.

Norinco International Thatta Power (Pvt.) Limited (NITPPL) is a project company and special purpose vehicle (SPV) 90% owned by Norinco International Cooperation Ltd. (a Chinese state-owned enterprise) and 10% owned by AN Energy (Private) Limited. It is responsible for owning, operating, building, and financing the Thatta 100 MW Wind Power Generation Project.

China North Industries Group Corporation Limited (NORINCO), would be the implementing contractor.

This project involved the construction of two different wind power plants, each with a 50 MW capacity, in Deh Kohistan 7/1, Tapo Jhimpir, District Thatta, in the Province of Sindh. In October 2019, the generation licenses for each facility were merged in order to lower overall project costs. It is unclear if works ever began.

📋 Staff Comments

According to multiple, official sources, the Government of Pakistan has issued sovereign guarantees in support of all loans issued by Chinese state-owned banks for independent power projects (IPPs) in Pakistan (see https://www.fmprc.gov.cn/ce/cepk/chn/zbgx/t1735166.htm and http://pk.chineseembassy.org/eng/zbgx/202110/t20211010_9558510.htm and https://www.dropbox.com/s/bmx3w2b38o7guxm/Debt%20Pricing%20of%20IPPs%20%28002%29.pdf?dl=0). As such, AidData assumes that the loan captured in this record is backed by a sovereign guarantee from the Government of Pakistan.

📚 Sources & References

APPLICATION FOR COST PLUS TARIFF BEFORE NEPRA
Application for a Generation License Norinco International Thatta Power (Private) Limited 50MW
中国驻巴基斯坦使馆发言人就美方涉中巴经济走廊言论答记者问
We do not have China debt problem: Umar
Debt Pricing of IPPs (002)
Modification in Generation Licence No. WPGL/36/2016 Licence Application No. LAG-348 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.