CER gets 18 % stake in Uch power plant

Islamabad: Creative Energy Resources Corporation (CER) announced that it had bought a strategic stake in the 586 MW Uch power plant in Pakistan from an affiliate of GE Energy Financial Services. But it did not disclose financial details of the transaction.

However, some knowledgeable sources confided that the CER, which is a regional power company owned by Swicorp Joussour (Saudi Arabia), had acquired an 18 percent stake in the power plant project.

According to the sources, International Power Plc, which has been operating with interests in over 40 power stations and some closely linked businesses around the world, has bought over 70 percent stake in this energy deal. The Hassan Associates is said to have acquired a small stake in the plant.

The Uch Power Limited (UPL) plant is a 586MW combined cycle thermal power plant that generates electricity, using low British Thermal Unit (BTU) gas from the indigenous Uch gas field, which is supplied under a long-term agreement by the Oil and Gas Development Corporation, majority owned by the Government of Pakistan.

The plant's output is sold to Wapda under a long-term contract. The plant is the lowest cost source of thermal power generation in Pakistan. In its Riyadh(Saudi Arabia)-datelined press release, the CER said that it will build, acquire, own and operate power generation, transmission and distribution facilities in the Middle East, North Africa, and South Asia (MENASA) region.

The generation projects will be based on conventional, thermal, as well as renewable energy. CER intends to partner with key players in the region to develop these facilities and the announcement is in line with this strategy.

Shahid Khan, Director of Investments, Swicorp Joussour said: 'Power is an important asset class for our investors, and we are pleased with the addition of Uch power to the CER power platform. We are confident that the Uch investment offers our investors access to high quality, risk-adjusted returns.

We look forward to continuing to work with the CER management team to develop and acquire further power related projects in the MENASA region where the growing economies and population levels have led to acute shortages of power that we hope to address.'

Commenting on the announcement, Shahzad Qasim, Founder and CEO of CER stated: 'The closing of this transaction is an important milestone for CER. We are excited about expanding the generation capacity at Uch to help meet the growing power demand in the country.

We are pleased to partner with International Power plc, Hawkins International, Inc and Hasan Associates and look forward to developing a fruitful relationship going forward. We would like to express our gratitude for the trust and confidence the Government of Pakistan and other stakeholders in the plant have placed in CER.'