The Hub Power Company Limited, colloquially known as HUBCO, is a Pakistani power company based in
Karachi
Karachi is the capital city of the Administrative units of Pakistan, province of Sindh, Pakistan. It is the List of cities in Pakistan by population, largest city in Pakistan and 12th List of largest cities, largest in the world, with a popul ...
, Sindh. It was the first
independent power producer (IPP) established in Pakistan, and before the termination of its energy agreement in October 2024, it was the largest IPP in the country.
HUBCO is listed on the
Pakistan Stock Exchange.
History
1991–1998: Initial years
Hub Power Company (Hubco) was founded in 1991.
The project was funded by $770 million in loan agreements and $325 million in equity from international investors.
The major investors included
National Power
National power is defined as the sum of all resources available to a nation in the pursuit of national objectives. Assessing the national power of political entities was already a matter of relevance during the classical antiquity, the Middle Ages ...
with 20.4 percent shareholding,
Xenel with 14.5 percent, and
Entergy with a 10 percent holding.
Hubco also raised $175 million through the issuance of
global depository receipts (GDRs) on the
Luxembourg Stock Exchange, which peaked at $13.25 upon introduction to the market on 5 October, with each GDR consisting of 25 shares.
Local investors were allocated approximately 69 million shares valued at $30 million following an
initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...
on the
Karachi Stock Exchange
The Pakistan Stock Exchange (PSX), founded as Karachi Stock Exchange (KSE), is a stock exchange based in Karachi, Pakistan. PSX was classified by MSCI as a Frontier markets, frontier market on 8 September 2021.
Pakistan Stock Exchange was fou ...
at PKR 13.60.
Of the $770 million loan, Hubco secured a $686 million, 12-year credit facility organized by
Citibank and other major banks on 30 September 1994, which included a $36.9 million concessional loan from the
Commonwealth Development Corporation and $465 million from loans facilitated by the
World Bank
The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
-funded public-sector energy development fund, including $166 million in standby funds at an interest rate of 2 percent plus
Libor.
The company also obtained a local currency loan of Rs 3,012 million ($98.4 million) on 2 October in Karachi, arranged by the
National Development Finance Corporation and involving several Pakistani banks.
By 1998, Hubco became the second largest listed company on the Karachi Stock Exchange by
market capitalization
Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders.
Market capitalization is equal to the market price per common share multiplied by ...
. Initially, the revenue of the company was denominated in
United States dollar
The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, currency code: USD) is the official currency of the United States and International use of the U.S. dollar, several other countries. The Coinage Act of 1792 introdu ...
s. In October 1998, the
Nawaz Sharif administration canceled parts of energy purchase agreement with Hubco due to
corruption
Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...
and high energy tariff.
1998–2018: Lawsuits, renegotiation of contracts, and decline
In 2000, Hubco and its investors, including Entergy and National Power, agreed to forgive $200 million of the $274 million
debt
Debt is an obligation that requires one party, the debtor, to pay money Loan, borrowed or otherwise withheld from another party, the creditor. Debt may be owed by a sovereign state or country, local government, company, or an individual. Co ...
owed by the
Water and Power Development Authority to Hubco. Hubco also reduced its
tariff
A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...
s and
operation and maintenance contracts in 2002, reducing
internal rate of return
Internal rate of return (IRR) is a method of calculating an investment's rate of return. The term ''internal'' refers to the fact that the calculation excludes external factors, such as the risk-free rate, inflation, the cost of capital, or fin ...
from 17 percent to 12 percent.
These adjustments were made to manage the remaining $74 million required for loan repayments.
Previously, Entergy had filed a lawsuit against WAPDA in the
International Court of Arbitration
ICC International Court of Arbitration is an institution for the resolution of international commercial disputes. It operates under the auspices of the International Chamber of Commerce (ICC) and consists of more than 100 arbitrators from rough ...
which was withdrawn following a settlement.
The lawsuit sought approximately $8 billion in damages over the 30-year life of the independent power project.
The claim was filed in response to WAPDA's withdrawal from the
power purchase agreement, which was based on allegations of
corruption
Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...
involving former Hubco's
business executive
A business executive is a person responsible for running an organization, although the exact nature of the role varies depending on the organization.
Executives run companies or government agencies. They create plans to help their organizations gr ...
s.
In 2008, Hubco acquired a 75 percent stake in Laraib Energy and initiated an 84MW run-of-river hydroelectric power project downstream on the
Mangla Dam. In 2013, Laraib Energy's New Bong
Hydropower
Hydropower (from Ancient Greek -, "water"), also known as water power or water energy, is the use of falling or fast-running water to Electricity generation, produce electricity or to power machines. This is achieved by energy transformation, ...
Plant commenced commercial operation.
In 2011, Xenel exited Pakistan and sold its stake of 140 million shares (12.3 per cent) at a price of Rs37 per share. A year later, National Power UK divested its 17.44 percent shareholding to
Dawood Hercules and
Allied Bank Limited at PKR 31 per share.
In 2013, Hubco incorporated its oil-fired Narowal Power Plant as its wholly-owned subsidiary.
In 2017, Hubco delisted its GDR from the Luxembourg Stock Exchange due to low trading volumes.
In 2018, Dawood Hercules divested its 15.7 percent shareholding to Mega Conglomerate at PKR 105.12 per share.
2018–present: Diversification and termination of contract
In 2019, the China Power Hub Generation Company (CPHGC) commissioned a 1.32GW coal-fired thermal power plant.
The $2 billion facility is now fully operational and is owned by CPHGC, a
joint venture
A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ...
between Hubco and China Power International.
Hubco holds a 74 percent stake in the venture, while China Power International owns the remaining 26 percent.
In 2022, Prime International, a
joint venture
A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ...
of Hubco, acquired the Italian energy multinational
Eni
Eni is an Italian oil and gas corporation.
Eni or ENI may refer to:
Businesses and organisations
* Escuela Nacional de Inteligencia, the Argentine intelligence academy
* Groupe des écoles nationales d’ingénieurs (Groupe ENI), a French engi ...
's E&P subsidiary Eni Pakistan.
In October 2024, Hubco prematurely terminated its energy purchase agreement for the
power station
A power station, also referred to as a power plant and sometimes generating station or generating plant, is an industrial facility for the electricity generation, generation of electric power. Power stations are generally connected to an electr ...
based in Hub with the
government of Pakistan
The Government of Pakistan () (abbreviated as GoP), constitutionally known as the Federal Government, commonly known as the Centre, is the national authority of the Islamic Republic of Pakistan, a federal republic located in South Asia, con ...
amid concerns about coercion and threats of
corruption
Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...
cases against IPP owners if they sought
international arbitration
International arbitration can refer to arbitration between companies or individuals in different states, usually by including a provision for future disputes in a contract (typically referred to as international commercial arbitration) or betwee ...
.
Group
Subsidiaries
* Narowal Energy Limited (NEL): Wholly owned by HUBCO. It manages and operates the Narowal Power Plant
[
* Hub Power Services Limited (HPSL): Wholly owned subsidiary of HUBCO
* Hub Power Holdings (HPHL): Incorporated to invest in future growth projects
* Thar Energy Limited (TEL): HUBCO has 60% shareholding in TEL which is setting up a 330-megawatt (MW) Thar Lignite Coal-based mine mouth Power Plant and is a part of the China-Pakistan Economic Corridor (CPEC)
* Laraib Energy Limited (LEL): HUBCO owns 74.95% of LEL which is the owner and developer of the New Bong Escape Power Project][
]
Associates
* China Power Hub Generation Company (CPHGC) is the project company for the development, construction and operation of 2×660 MW Coal-fired Power Plant in Hub, Balochistan near the Hub plant. HUBCO has 46% stake in CPHGC[
* Sindh Engro Coal Mining Company Limited (SECMC) is an open-pit mining company in which HUBCO has 8% stake][
* ThalNova Power Thar (Pvt.) Ltd. is a 330 MW mine-mouth lignite fired power plant in which HUBCO has acquired majority shares]
Operational plants
* Hub Plant (1,292 MW) is located 60 km from Karachi in Hub. The electricity at Hub is generated by four 323 megawatt oil-fired units that are supplied by a 78 km long pipeline from Pakistan State Oil. It consists of four generating units, each unit has capacity of 323 MW gross output, with an oil-fired single re-heat boiler and tandem compound and two cylinder condensing steam turbines directly coupled to a hydrogen cooled generator.
Other projects
*Sindh Engro Company Limited (SECMC) has developed a coal mine at Thar which has the seventh largest reserves of coal in the World. SECMC achieved Commercial Operations for Phase I in July, 2019 and will be embarking to double its coal mining capacity to supply fuel to HUBCO's Thar Energy Limited and ThalNova projects which are under construction.
See also
* List of power stations in Pakistan
* HUBCO Green
References
External links
*
{{KSE 30
Companies based in Karachi
Companies in the KSE 100 Index
Companies listed on the Pakistan Stock Exchange
Electric power companies of Pakistan
Energy companies established in 1994
Energy in Balochistan, Pakistan
Pakistani companies established in 1994
1994 initial public offerings