Balloki Power Plant

The Balloki Power Plant is a 1,223 MW powerplant currently under construction near Kasur, in the Punjab province of Pakistan. Groundbreaking was commenced by Prime Minister Nawaz Sharif on November 11, 2015, and construction is scheduled for completion by December 2017.^[1] The project will utilize re-gasified liquefied natural gas (RLNG) for fuel, with diesel as an alternate backup. A 40 kilometer long transmission line with a capacity of 500 kilovolts will also be constructed between the new plant and a grid station in southern Lahore.^[2]

Bidding was open to international firms for the 82 billion ruppee project.^[3] China’s Harbin Electric Company was announced as the lowest evaluated bidder for the project on October 2, 2015, having offered a levellised electricity cost of 7.973 cents per unit, outbidding the Turkish conglomerate Enka İnşaat ve Sanayi A.Ş and GE Consortium which both stood in second with 8.185 cents per unit tariff, followed by China Machinery Eng Co (CMEC) & SEFC at 8.304 cents, and Hyundai Engineering at 8.332 cents per unit.^[4]

Project Financing

Plans for the project call for private sector investment to construct the plant, with the private company then selling electricity to the government of Pakistan at pre-negotiated rates. As the project is to be constructed largely by the private sector, financing loans for the project do not fall under the concessionary loan agreement which finances CPEC projects under development by the Pakistani government at interest rates of 1.6%. Nevertheless, it will still qualify for subsidized loans with an interest rate of 5% which are to be dispersed by the Exim Bank of China.^[5] For comparison, loans for previous Pakistani infrastructure projects financed by the World Bank carried an interest rate between 5% and 8.5%,^[6] while interest rates on market loans approach 12%.^[7]

References