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Oracle Power signs MoU with China state-owned firms to advance Pakistan coal assets

“This development is a transformational step for Oracle," said chief executive Shahrukh Khan
Oracle will retain a 12.1% equity holding in the Thar project

Oracle Power PLC (LON:ORCP) has signed a memorandum of understanding (MoU) with two China state-owned companies to advance its coal assets in Pakistan.

The UK energy developer said the MoU with Sichuan Provincial Investment Group Co. Limited (SCIG) and PowerChina International Group Limited records the intention to proceed to a formal agreement to collaborate in setting up, constructing, owning and operating the company’s flagship Thar project.

WATCH: Oracle Power hails funding MoU with two chinese state-owned enterprises

The project is a combined lignite coal mine and mine mouth power plant located in Block VI of the Thar desert in the south-eastern Sindh Province of Pakistan.

Under the terms of the MoU, Oracle will hold a 12.1% equity stake in the project while SCIG will take 78% and PowerChina will have 9.9%.

Oracle will retain responsibility for applying for and obtaining all licences, approvals, permissions as may be required by Pakistani Government authorities.

SCIG and PowerChina will be in charge of all liaison and approvals required through Chinese authorities, including in relation to the China Pakistan Economic Corridor.

READ: Oracle Power marks ‘important milestone’ as Chinese tie-up in Pakistan advances

The total funding required for the project is expected to be around US$1.6bn, as previously announced. Financing of the project will have an estimated debt-to-equity ratio of 75:25. All parties will fund the project in cash.

"I am delighted to confirm the formal signing of the MoU,” said Oracle chief executive Shahrukh Khan.

“This development is a transformational step for Oracle and the culmination of months of work between the various parties.”

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