The Hong Kong-based Consolidated Electric Power Asia (CEPA) has signed of an agreement to build power plants in Pakistan worth $1,600 million.

The contract involves building two 660-MW coal-fired units at Keti Bandar on the coast, 150 kilometres south east of Karachi, in Sind province. The work is due to be completed in three years.

The plants are the first phase of wider programme. In June, CEPA received a letter of support from the government to establish eight 660-MW power units in Pakistan, worth a total estimated $8,000 million (MEED 23:6:95). The letter was issued to enable CEPA to put some of the legal formalities for the first phase of the project into place.

Negotiations had faltered over whether domestic or imported coal would be used for the eight stations. The new agreement provides for imported coal to be used for phase one, and domestic coal for the rest of the generators if that is proved to be feasible.

CEPA has also initialled a separate power purchase agreement with the Water & Power Development Authority (WAPDA). WAPDA will purchase electricity from the Keti Bandar project's first phase for 30 years, a CEPA statement said.

CEPA's parent company is Hong Kong-based Hopewell Holdings. Hopewell's main shareholder is businessman and engineer Gordon Wu. CEPA has been bidding for power projects in India, China, the Philippines and Indonesia.

Wu signed a memorandum of understanding in October to set up 5,280 MW of power units, as well as transmission lines and infrastructure, including roads and dedicated rail links to the inland Thar coal reserves. The memorandum called for eight units of 660 MW each, with the first to come on stream by December 1997 and the last by 2000. Investments in a transmission network and the development of the Thar coal fields were also planned (MEED 21:10:94).