Oracle Power Plc (LON:ORCP) has provided details on its deal with state-backed Chinese groups to advance its coal assets in Pakistan.
A formal deal with Sichuan Provincial Investment Group Co. Limited (SCIG) and PowerChina International Group (PowerChina) is now expected to be signed in November, the company told investors.
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The AIM-quoted coal company is due to retain a 12.1% equity stake in the asset, Block VI, with SCIG due to take 78% and PowerChina will have 9.9%.
Oracle noted that the project’s development has been estimated at around US$1.6bn and discussions are continuing to ‘firm up’ the estimate, as well as optimise and cut costs where possible. It is anticipated that the project funding will have a debt-to-equity ratio of 75:25.
"I am delighted that we have reached this important milestone in the development of our project,” said Shahrukh Khan, Oracle chief executive.
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“The company has worked tirelessly over the last few years to provide the funding framework required for such a significant project for Pakistan.
He added: “We are delighted to move forward with PowerChina and SCIG, two preeminent Chinese State-owned Enterprises and leaders in their field, as our chosen partners.
“The structure of the financing, particularly with investment coming in at the project level, has significantly reduced the potential dilution for the company's shareholders and has ensured the company retains a significant interest in the project.”