October 08, 2008

ALEL signs PPA with NTDCL for Lakhra power plant

Daily News reported that Pakistan’s Associated Lakhra Energy Limited and National Transmission & Dispatch Company Limited have signed the power purchase agreement for the 3x50MW coal fired Lakhra power plant. Lakhra power plant, set up by WAPDA in 1996 is Pakistan’s only coal fired power plant and is currently producing about 30 MW of power from Lakhra coal.

ALEL had been awarded the project through a competitive bidding process and has undertaken to rehabilitate the plant and ramp up production to at least 102 MW within 9 months. ALEL has been leased out the plant for 20 years.

Mr Tariq Hameed federal minister for water & power, while speaking at the signing ceremony, stressed the need for Pakistan to broaden its energy mix and capitalize on coal for cheap power generation. He said that “This is the first time we are leasing out a power plant to the private sector and I am very pleased that this project will be completed and brought to the highest international standards within 2008.”

Mr Iqbal Z Ahmed chairman of ALEL said that the coal based power generation is essential for Pakistan to ensure quick and affordable electricity. He added that “The successful rehabilitation of the Lakhra power plant will encourage local and foreign investors to look to coal for power generations.”

Mr Munawar B Ahmad MD of PEPCO said that while 74% of China’s, 55% of India’s and 22% of America’s energy mix are coal based, in Pakistan coal based power generation represents less than 0.5% of the energy mix. He added that “We went terribly wrong in planning and implementing coal based power and the projects such as this one are essential for Pakistan.”