KARACHI: Hub Power Company Limited (HUBCO), Pakistan’s largest Independent Power Producer (IPP), has unveiled plans to invest up to \$51 million (approximately Rs14.61 billion) in two of its key Thar-based coal power projects—Thar Energy Limited (TEL) and ThalNova Power Thar (Private) Limited (TN).
In a notice submitted to the Pakistan Stock Exchange (PSX) on Wednesday, HUBCO revealed that its board has approved resolutions to extend Sponsor Support Contribution Letters of Credit (SSC LCs) for both projects to ensure smooth debt servicing and meet potential financial obligations.
The company seeks shareholder approval at an Extraordinary General Meeting (EGM) scheduled for August 7, 2025, to extend guarantees of up to \$31 million for TEL and \$20 million for TN. These guarantees may be provided as either equity or subordinated debt.
TEL and TN are both 330MW mine-mouth coal-fired plants located at Thar Block II. HUBCO holds a 60% stake in TEL and a 38.3% indirect stake in TN through its subsidiary Hub Power Holdings Limited.
The extensions aim to address potential liquidated damages and shortfalls in debt servicing, particularly in light of disputed HVDC charges levied by CPPA-G. The new support tenor will last until at least January 2034 for TEL and July 2034 for TN, or until the end of each project’s loan tenure.
HUBCO has already invested \$79 million in TEL and \$52 million in TN. Both projects are developed under the Government of Pakistan’s 2015 Power Policy, offering a 20% return on equity in USD. The company views project completion as a major milestone toward generating surplus and future dividends.
