The Lalpir Power Complex, () is a defunct power plant complex located in Mehmood Kot, District Muzaffargarh,

Punjab Punjab (; ; also romanised as Panjāb or Panj-Āb) is a geopolitical, cultural, and historical region in South Asia. It is located in the northwestern part of the Indian subcontinent, comprising areas of modern-day eastern Pakistan and no ...

Pakistan Pakistan, officially the Islamic Republic of Pakistan, is a country in South Asia. It is the List of countries and dependencies by population, fifth-most populous country, with a population of over 241.5 million, having the Islam by country# ...

. It comprised two power plants: Lalpir Power and Pakgen Power, both of which were established in 1994 and remained active until 2024, when 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 ...

prematurely terminated its energy purchase agreement amid concerns about coercion and threats to file

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 should they seek

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 ...

. It was incorporated in 1994. Lal Pir 1 produces 362 MW of electricity whereas Lal Pir 2, which is also known as PakGen Power, produces 365MW of electricity. It is owned by Nishat Group. It is listed on the

Pakistan 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 market on 8 September 2021. Pakistan Stock Exchange was founded in 1947 as ...

History

Lal Pir power complex was established by the

AES Corporation The AES Corporation is an American utility and power generation company. It owns and operates power plants, which it uses to generate and sell electricity to end users and intermediaries like utilities and industrial facilities. AES, headquarte ...

in 1994 and consists of a single residual fuel-oil boiler and a steam turbine generator. Nichimen Japan was hired as an EPC contractor. In 2010, Nishat Group and a consortium acquired the two plants, AES Lalpir and PakGen from AES Corporation. Nishat Group became the controlling sharesholder of the company with a 50 percent shareholding, whereas

Abu Dhabi Investment Council The Abu Dhabi Investment Council (; ADIC or the "Council") is one of the investment arms of the government of Abu Dhabi. It started operations in April 2007, as a spin-off of the Abu Dhabi Investment Authority (ADIA). ADIC is responsible for in ...

(ADIC), which is owned by the

Government of Abu Dhabi The Government of Abu Dhabi () is the subnational authority that governs the Emirate of Abu Dhabi, one of the seven constituent monarchies which make up the United Arab Emirates. The executive authority and head of the government is the ruler of ...

, acquired 30 percent of the shares, and The City School received 20 percent of the shares.

Lal Pir 1

In April 1994, the project's final financing was completed with the

International Finance Corporation The International Finance Corporation (IFC) is an international financial institution headquartered in Washington, D.C. and a member of the World Bank Group that offers investment, advisory, and asset-management services to encourage private ...

(IFC) signing a $49.5 million debt/equity package on April 7. The total project cost was estimated at $350 million. The IFC provided a $40 million loan and acquired a 10 percent equity stake in AES Lal Pir, a subsidiary created by AES Corporation to operate the plant, with AES retaining a 90 percent ownership. The

Bank of Tokyo was a Japanese foreign exchange bank that operated from 1946 to 1996. In January 1996, it merged with Mitsubishi Bank to form The Bank of Tokyo-Mitsubishi (now MUFG Bank). Its headquarters was in the Nihonbashi district of Tokyo, adjacent to the ...

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

also arranged a ¥20,250 million ($209 million) loan from international commercial banks, guaranteed by the Export-Import Bank of Japan (Jeximbank). In December 1997, the facility began commercial operations, following the establishment of a 30-year power purchase agreement with the

Water & Power Development Authority The Pakistan Water & Power Development Authority (), colloquially known as WAPDA, is a Pakistani government-owned public utility agency maintaining hydropower and water in Pakistan, although it does not manage thermal power plants. WAPDA includes ...

(WAPDA) and a fuel supply agreement with

Pakistan State Oil Pakistan State Oil Company Limited (PSOCL) operating as PSO, is a Karachi-based, state-owned energy company. Established in 1976, the company operates in the oil and gas industry.As of 2024, it maintains a network of 3,580 retail outlets, nine i ...

which was signed in 1994. In 2010, Lalpir Power was acquired by a consortium led by the Nishat Group at a price of PKR 14.9 per share. In 2013, Lalpir Power was listed 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 ...

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 ...

at a strike price of PKR 22 per share.

Lal Pir 2

In February 1996, AES Transpower, a subsidiary of

based in the United States, finalized the financing for the construction of the Lal Pir-2 power station in

Muzaffargarh Muzaffargarh is a city in the province of Punjab, Pakistan. Located on the bank of the Chenab River, it is the capital of the eponymous district. It is the 39th most populous city of Pakistan. History The Muzaffargarh region was an agricultura ...

Punjab, Pakistan Punjab (, ) is a Administrative units of Pakistan, province of Pakistan. With a population of over 127 million, it is the Demographics of Pakistan, most populous province in Pakistan and the List of first-level administrative divisions by popu ...

. The project was undertaken by AES Pak Gen, a wholly-owned subsidiary of AES Transpower. The financing for the project included a $40 million buyer's credit facility from the Export-Import Bank of Japan (Jeximbank) and an additional ¥14,203 million ($133 million) loan. The

arranged and syndicated the loan among 15 private financial institutions. The Japanese

Ministry of International Trade and Industry The was a Ministry (government department), ministry of the Government of Japan from 1949 to 2001. The MITI was one of the most powerful government agencies in Japan and, at the height of its influence, effectively ran much of Japanese industri ...

provided insurance coverage for this portion of the financing. The

(IFC) also contributed to the project's financing by providing a direct loan of $20 million, assisting in arranging a $50 million syndicated loan with

Dresdner Bank Dresdner Bank AG () was a German bank, founded in 1872 in Dresden, then headquartered in Berlin from 1884 to 1945 and in Frankfurt from 1963 onwards after a postwar hiatus. Long Germany's second-largest bank behind Deutsche Bank, it was eventually ...

and

ING Bank ING Group N.V. () is a Dutch multinational banking and financial services corporation headquartered in Amsterdam. Its primary businesses are retail banking, direct banking, commercial banking, investment banking, wholesale banking, private ban ...

, and making an equity investment of $9.5 million. AES itself invested $85.5 million in equity. The total estimated cost of the Lal Pir-2 project was $350 million. The power station, with a capacity of 365 MW, was constructed on a

build–operate–transfer Build–operate–transfer (BOT) or build–own–operate–transfer (BOOT) is a form of project delivery method, usually for large-scale infrastructure projects, wherein a private entity receives a concession (contract), concession from the public ...

(BOO) basis and is the second AES facility in Punjab. It is equipped with a steam turbine and uses residual fuel oil. Nichimen Company of Japan was awarded the turnkey contract, and

Mitsubishi Heavy Industries is a Japanese Multinational corporation, multinational engineering, electrical equipment and electronics corporation headquartered in Tokyo, Japan. MHI is one of the core companies of the Mitsubishi Group and its automobile division is the prede ...

(MHI) supplied the major equipment. The station began commercial operations in December 1997 after signing power purchase agreements with the

(WAPDA) and fuel supply contracts with

. In 2011, Pakgen Power Limited, also known as Lal Pir-2, was listed on the

following an

at a strike price of PKR 19 per share.

Shareholding pattern

Lalpir Power Company

References

External links

Lal Pir Power

Pak Gen Power
{{Nishat Group AES Corporation Nishat Group 1994 establishments in Pakistan 2010 mergers and acquisitions 2013 initial public offerings Electric power companies of Pakistan Companies listed on the Pakistan Stock Exchange Muzaffargarh District