KARACHI: The Private Power and Infrastructure Board (PPIB) has issued Letter of Support (LOS) to Thar Energy Limited (TEL) for developing a 330 MW Mine Mouth Power Project at Thar. TEL, a wholly owned subsidiary of the Hub Power Company Limited (Hubco), would have to achieve Financial Close for the Project within nine months, said Shamsul Islam, Company Secretary at Hubco. A mine mouth electric plant is a coal burning electricity generating plant that is built close to a coal mine where coal is excavated from the dig site, placed on a conveyor belt, and run directly into the plant where the coal will be burned. The project is being developed as part of China Pakistan Economic Corridor (CPEC) and will be completed under the Power Policy for investment in Power Projects in Pakistan. The Hubco, which is a largest independent power producer (IPP), has intended to set up a 1×330 MW mine mouth Power Plant through it wholly owned subsidiary TEL. However, one of drawbacks of these types of plants is that coal plants, like most other steam-producing electricity-generating plants, typically withdraw and consume water from nearby water bodies, such as lakes, rivers, or oceans, to create steam for turning their turbines. Coal plants can use large amounts of water for cooling and steam production. This can potentially be a major use of water, and may pose environmental issues. The project of 1×330 MW mine mouth plant is based on indigenous coal to be mined from the coal fields of Thar Block II, which is a 95.5 square kilometer (kmz) area of coal field awarded to Sindh Engro Coal Mining Company (SECMC) for exploration and mining of lignite primarily for power generation projects. According to the feasibility report of the project, Mine Mouth Power Plant will be the most suitable option for utilizing of Thar Lignite. The TEL’s 1×330 MW power plant will be located within the Block-II, which is one of the thirteen blocks identified and marked in Thar Coal Fields by the Sindh Engro Coal Mining Company (SECMC), 500 kV transmission lines for power evacuation from Thar Block ll will be constructed by National Transmission and Dispatch Company (NTDC). These lines are planned to be connected to Matiari grid, 230 km away, from where the power will be transported to the load center of Pakistan in Punjab through HVDC transmission network. The total project cost is as per the Coal Upfront Tariff 2014 is estimated at $497.7 million including the total equity worth of $124.4 million (25%) and the total debt is $373.3 million (75%). Majority of the debt will be raised from Chinese financial institutions whereas some portion may be raised from local banks.