LONDON: Oracle Power PLC, the UK energy developer of a combined lignite coal mine and mine mouth power plant in Thar desert in the south-east of the Sindh Province of Pakistan, has entered into a Joint Development Agreement (JDA) with the Private Office of H.H. Sheikh Ahmed Dalmook Juma Al Maktoum and China National Coal Development Company Limited.

 This JDA follows on from the Company’s announcement of 19 November 2019 detailing that the Company’s flagship Thar Block VI has been included in a proposed new initiative between the governments of Pakistan and China with respect to gasification of coal into fertiliser.

The Project is also enshrined within the intra-government initiatives under the China-Pakistan Economic Corridor (CPEC). This new initiative runs in parallel to the Company’s remaining long-term plan to construct and operate a mine-mouth power plant on Thar Block VI, also included as a “Priority Project” within the CPEC.

The JDA foresees the creation of a Special Purpose Vehicle to develop and undertake both projects. It is envisaged that the Project will be funded on a 75% debt and 25% equity basis. China National Coal Development Company Limited is proposed to have 73%, Private Office will have 15% and Oracle Power will have 12% stake in the project.

Going forward the Private Office and Oracle Power will be responsible for, amongst other things, securing all the required permits, licenses, governmental and regulatory approvals, whilst also ensuring CNCDCL are introduced to the highest Government stakeholders, Ministries, Government agencies and departments in order to enable the Parties to jointly further advance and develop the Project.

CNCDCL will be primarily responsible for providing the required technical and commercial support in order to meet the project requirements, as well as arranging all the debt required to develop the Project. This includes applications for obtaining/granting of contracts and licenses necessary for the for the development, establishment, construction, completion, commissioning, commercial operation and maintenance of the Project.

A detailed agreement will be put in place once the Parties have finalised agreement on individual shareholdings and funding commitments. It is envisaged that the development expenditure incurred by Oracle up to the 15 December 2019 will be capitalised.

Naheed Memon, CEO of Oracle Power said: “I am delighted to now confirm and welcome our new partners, His Highness Sheikh Ahmed Dalmook Juma Al Maktoum and China Coal. I believe these two partners bring with them the requisite expertise, financial wherewithal and global presence to ensure a Project of this scale can be brought to fruition. This Project is of national significance not just for Pakistan but, we believe, also for China as part of its One Belt Initiative and inclusion in CPEC. I am honoured that our new partners share Oracle’s vision and can see the truly transformational impact that the development of Thar Block VI can provide.

The outlook for Oracle has never been brighter and I look forward to updating the market on further developments as we move forward in 2020.”