Oracle Coalfields PLC (LON:ORCP) has taken encouragement from a neighbouring coal-fired power station project in Pakistan reaching financial close.
The AIM-listed group is seeking finance to build its own coal-fired power station at Block V1 in Thar Province and said the nearby power project (on Block II) is someway down the road to construction.
Oracle’s site was recently put on the priority list on the China-Pakistan Economic Corridor (CPEC), which should result in the fast-tracking of debt-funding for the project.
The CPEC inclusion should also assist in the various approvals required both at Federal and Provincial level in Pakistan and also with the Chinese financial institutions, said Shahrukh Khan, chief executive.
“Progress with potential Chinese partners is taking longer than we might have hoped, but detailed discussions are at present underway with several State-owned Enterprises, as financing partners and as EPC contractors.”
Oracle initially wants to build a 660Mw plant, rising eventually to 1,320Mw.
Next steps are for a power purchase agreement (PPA) application to be made along with the electricity tariff application and a generation licence application.
Work is continuing to complete the Environmental Impact Assessment ("EIA") for the Power Plant as part of the application process.
In addition, on site preparation work is underway for development in particular to establish land ownership so that land acquisition and resettlement.
“Our work in 2017 will concentrate on formalising agreements and contracts to bring the project to full implementation, in line with the fiscal incentives including the continuing project Internal Rate of Return, along with securing all the financing arrangements.”
Losses in 2016 were £913,000 (£943,000). Cash at the year-end was £506,000.