Oracle Power Plc / EPIC: ORCP / Market: AIM / Sector: Mining
11 March 2020
Oracle Power PLC
("Oracle", the "Company" or the "Group")
Oracle Notes Further Strong Support for Development of Thar Block VI
Oracle Power PLC (AIM: ORCP) is pleased to note that a letter, dated 9 March 2020, from the Minister of Energy for the Government of Sindh (Mr. Imtiaz Ahmed Shaikh) to the Chairman of the China Pakistan Economic Corridor ('CPEC') Authority (Lieutenant General (Retd) Asim Saleem Bajwa) and copied to, inter alia, the Chinese Ambassador to Pakistan and Oracle's CEO, Naheed Memon, (the 'Letter'). The Company understands that the Letter reflects further the recent discussions of an official meeting in Karachi on 21 February 2020.
· Letter from Ministry of Energy for the Government of Sindh to Chairman of the CPEC Authority confirms continued and strong support for the development of Thar Block VI, in which Oracle Power holds a 100% interest through its subsidiary, Sindh Carbon Energy Ltd ('SCEL')
· Confirmation of approval for the issuance of the Letter of Intent ('LOI') by the Private Power and Infrastructure Board ('PPIB')on application and due process being adhered. Oracle, on behalf of the Consortium, will shortly submit the final LOI application documents to the PPIB
· Joint Investment Agreement ('JIA') and Shareholders Agreement to be drafted and expected to be signed at either the upcoming bi-annual Joint Co-operation Committee Meeting or a visit by high-ranking Chinese officials to Pakistan
Naheed Memon, CEO of Oracle, said:
"Oracle recognises and gratefully acknowledges the support it is receiving, as is evident in this letter received from the Office of the Minister of Energy for the Government of Sindh. The level of support now witnessed from these official channels is noteworthy and a testament to the quality of our work on the ground. The prominence of the parties alongside Oracle was acknowledged, with reference to the financial and technical capabilities of China Coal.
"Our partners in the Project, China Coal and His Highness are keen to progress the development of Block VI as quickly as possible. They have made clear, they intend to sign a Joint Investment Agreement and Shareholders Agreement with Oracle at the upcoming JCC Meeting, or during a Chinese State visit whichever takes place sooner."
The Board acknowledges that the Letter is another important endorsement, which underlines the strong commitment from the Ministry of Energy, for Oracle's flagship Thar Block VI project (the 'Project').
The Minister of Energy for the Government of Sindh reiterated his support for the development the Project and the Letter noted the Project is on the Priority List for power developments under China-Pakistan Economic Corridor ('CPEC'), following its upgrade to this level in 2017.
Moreover, the Letter confirmed that in November 2019, Block VI was also included in CPEC for the conversion of coal to gas and urea projects (please see the Company's announcement of 19 November 2019 for further information). This makes it the only project within CPEC with development across both energy and oil & gas. The Letter placed significant emphasis on the importance of this with respect to increasing food security for Pakistan, with Block VI also providing a new dimension for bilateral CPEC cooperation and increase investor confidence in Pakistan.
Oracle, on behalf of the Consortium (being Oracle, China Coal and the Private Office of His Highness Sheikh Ahmed Bin Dalmook Al Maktoum) will shortly apply for the LOI, to be granted to China Coal (as the main sponsor of the Project), for the 1,320MW power plant, which requires the submission of final application documents on the Consortium to the PPIB. The Minster of Energy made a specific request for the early, and prioritised, issuance of the LOI by PPIB.
In addition, the Company believes that China Coal and the Private Office of HH Sheikh Ahmed Bin Dalmook Al Maktoum are ready to sign a JIA and Shareholders Agreement for the Project with Oracle. This is intended to take place during the next JCC meeting, or the upcoming high-level visit to Pakistan by Chinese officials, expected mid-2020.
For further information:
Oracle Power PLC
+44 (0) 203 580 4314
Strand Hanson Limited (Nominated Adviser)
Rory Murphy, James Harris, Jack Botros
+44 (0) 20 7409 3494
Brandon Hill Capital Limited (Joint Broker)
+44 (0) 203 463 5000
Shard Capital (Joint Broker)
St Brides Partners Limited (Financial PR)
+44 (0) 20 7186 9952
+44 (0) 20 7236 1177