Oracle Power PLC Operational update (2997N)
17 January 2019 - 6:00PM
UK Regulatory
TIDMORCP
RNS Number : 2997N
Oracle Power PLC
17 January 2019
17 January 2019
ORACLE POWER PLC
("Oracle" or the "Company")
Operational update
Oracle Power PLC (AIM:ORCP), the UK energy developer of a
combined lignite coal mine and mine mouth power plant located in
the Thar desert in the south-eastern Sindh Province of Pakistan,
today provides an update on recent operational and macro
developments.
Headlines :
-- Block VI maintained as Priority Project in 8th Joint Cooperation Committee ("JCC") meeting;
-- China Pakistan Economic Corridor ("CPEC") approve Oracle proposed expansion to 700MW;
-- Consortium partnership change noted in CPEC.
The 8th JCC meeting took place on 20 December 2018 in Beijing.
This is an intra-Government meeting between China and Pakistan,
jointly chaired by the Vice-Chairman of China's National
Development and Reform Commission and by Pakistan's Minister of
Planning Development and Reform, which oversees the initiatives of
CPEC. The meeting has confirmed the following:
-- Oracle's project retained its status as one of the Priority
Projects of the CPEC Energy initiative.
-- The Company has been granted approval for the proposed
increase in capacity from 660 MW to 700 MW. This approval includes
the upgrade to supercritical technology.
-- As part of a broader drive to indigenous power generation,
the JCC reconfirmed 19 other Energy Projects promoted under CPEC,
totalling 13,630MW, noting 7,240MW of which were currently under
construction. The remaining 6,390MW, including Oracle's Block VI,
were working towards financial close.
-- The Pakistan government also committed that all transmission
lines for the evacuation of power from CPEC projects would be
operational before the Commercial Operation Date of each
project.
Following the signing of the Memorandum of Understanding ("MOU")
on 19 December 2018 with Beijing Jingneng Power Company Limited
("BJPC") and PowerChina International Group Limited ("PowerChina")
(See Company RNS of 20 December 2018 for further details on terms
of the MOU) all parties are working to achieve financial close as
soon as is feasible. The principal outstanding areas now required
to reach financial close include, inter alia:
-- Engineering, Procurement and Construction ("EPC") contract
and Operation and Maintenance contract ("O&M") contracts;
-- For the power plant, issue of a Letter of Intent by Private
Power Infrastructure Board to secure a Generation Licence;
-- Between the MOU partners, finalisation of Definitive
Agreements, including agreeing Oracle's equity interest;
-- Agreement of project financing with Sinosure, the Chinese export credit agency;
-- Finalisation of the Power Purchase Agreement and the
Implementation Agreement which includes a sovereign guarantee of
payment.
There has been renewed emphasis from the new Government in
Pakistan on the development of indigenous coal in Pakistan, as an
integral element of the country's energy mix.
Oracle's project has been significantly derisked by the progress
in the neighbouring integrated open-pit coal mine and power plant
project in Thar, Block II, with initial power plant trials
understood to be taking place in the near future. Block II is a
joint venture between the provincial Government of Sindh (as
majority shareholder) and private Pakistani interests.
The Board recognises that 2018 was a challenging year for the
Company and its shareholders, particularly given the delays
surrounding financial close. Oracle and the newly formed consortium
are advancing the project to financial close in an expeditious
manner. The Company now expects a steady stream of newsflow as the
various requirements mentioned above are met. Shareholders will be
updated on subsequent progress in due course.
For further information:
Oracle Power PLC +44 (0) 20 3580
Shahrukh Khan 4314
Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409
Rory Murphy, James Harris, Jack Botros 3494
Brandon Hill Capital Limited (Joint Broker) +44 (0)20 3463
Oliver Stansfield 5000
Peterhouse Corporate Finance (Joint Broker) +44 (0)20 7220
Charles Goodfellow 9791
Blytheweigh +44 (0) 20 7138
Tim Blythe, Camilla Horsfall, Megan Ray 3204
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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