KARACHI, June 20: Sindh has received $2.5 billion investment offer for a mining project in Thar coalfield from reputed national and international investors.

The project, advertised by the Mines and Mineral Department inviting expressions of interest from private sector parties, received a very good response and in all seven proposals were received.

The joint venture project, in which the Sindh government will have 50 per cent equity, will ultimately grow into a 1,000MW coal-based power plant with a total investment of seven to eight billion dollars.

The companies, which submitted proposals, are Engro Group, Al Thuwairqi Group of Saudi Arabia, Jahangir Siddiqui Group, Sinocoal International Engineering Group, China, Lucky Cement Group, Giga Group, and other groups from the UAE.

This is the first major investment offer for a single project in the province since the PPP government took over in March.

The mining development project will require three to four years to produce six million tons of coal per year.

The coal will be sufficient to provide fuel to a 1,000MW power plant. The mining capacity can be expanded to 30 million tons per year which is sufficient to generate electricity up to 5000MW in three years.

Sources at the minerals department told Dawn on Friday that the government offers top priority to development of Thar coalfield, which can meet the cheaper energy needs of not only the province but of the entire country.

A committee will be formed to evaluate the investment proposals and interested parties would be asked to submit detailed proposals for mining and power generation based on Thar coal.

Sindh has many attractive sectors for investors, like mining, agriculture, power generation, steel, automobiles. The government needs to open these areas for the private sector to create economic opportunities for the people.

Thar has 175 billion tons of coal deposits, of which exploration of eight blocks has been completed. Infrastructure development in the Thar coal mining area is in an advanced stage, and roads network, electricity, communication and water supply system have been completed.

The proposed mining project has been designed on debt equity ratio of 75-25 and the sponsoring company should have worth of $200 million.

The sources said that Pakistan could follow example of Poland and South Africa, which produces 93 per cent energy from coal followed by China 78 per cent and India 69 per cant against a meager 0.1 per cent in Pakistan.

The Thar coal power project could not materialise in the past due to differences on power tariff between a German and a Chinese company and Wapda.

Sindh now hopes to get a favourable tariff for the power produced from Thar coal from the PPP government at the centre.