Oracle Power PLC (LON:ORCP) said it is focusing on formalising deals with its Chinese partners this year to advance its Thar coal-fire power plant in Pakistan after making progress on the project in 2017.
Thar is a combined lignite coal mine and mine mouth power plant in Block VI in the south-eastern Sindh Province of Pakistan.
In its 2017 results on Thursday, Oracle said one of last year's highlights was signing a memorandum of understanding with Sichuan Provincial Investment Group Company Limited and Power China, its two co-developers on Thar.
Under the terms of the MoU, Oracle will hold a 12.1% equity stake while its two Chinese partners SCIG and Power China will initially own 78% and 9.9% respectively.
In February, the Private Power and Infrastructure Board granted Orcale’s request for a letter of intent to allow for a generation licence and tariff application to be submitted to National Electric Power Regulatory Authority for the next stage in the approval process. The PPIB issued the letter of intent along with a notice to proceed.
Once the application is submitted, PPI will issue a letter of support so the power purchase agreement can be finalised with the Central Power Purchasing Authority along with the implementation agreement with the Pakistan government.
Oracle said this will pave the way for financial close.
The group is also finalising engineering and procurement contracts with its Chinese partners along with operation and maintenance contracts for the construction and operation of the mine and power plant.
“Our work in 2018 will concentrate on formalising detailed agreements with our Chinese partners including securing of the financing for their share of the equity and all project debt,” said interim chairman Mark Steed.
“We will also work with relevant government bodies with regards to permissions, licences and other approvals that need to be obtained. “
The company raised £771,000 last year and a further £550,000 in March before costs to support its projects.