Shareholders of HUBCO have given their approval to provide $51 million in guarantees for coal projects based in Thar.
Hub Power Company Commits $51 Million to Thar Coal Projects
The Hub Power Company Limited (HUBCO) has approved financial guarantees totaling $51 million for its two Thar coal power projects: Thar Energy Limited (TEL) and ThalNova Power Thar (TN). These guarantees are structured as standby letters of credit (SBLCs), with up to $31 million allocated for TEL and up to $20 million for TN.
The guarantees were authorized by HUBCO shareholders during an extraordinary general meeting held on August 7, 2025. The top management of HUBCO has been authorized to negotiate with banks and financial institutions for the issuance and maintenance of these standby letters of credit.
Details of the Projects
TEL is a 330 MW mine-mouth coal-fired power plant located at Thar Block II, where HUBCO owns a 60% stake. TN, also a 330 MW mine-mouth coal-fired power plant, is situated at the same site, and HUBCO holds a 38.3% stake through its wholly owned subsidiary, Hub Power Holdings Limited (HPHL).
Both TEL and TN operate under the Government of Pakistan’s 2015 Power Policy, which offers a 20% return on equity in USD terms. HUBCO has already invested approximately $79 million in TEL and $52 million in TN.
Terms of the Guarantees
The $31 million guarantee for TEL is valid until January 2034 or until the end of TEL’s project loan term, whichever is later. The $20 million guarantee for TN remains effective until July 2034 or the conclusion of TN’s project loan.
The CEO, CFO, and Company Secretary of HUBCO have been authorized to handle all negotiations, procurements, and documentation related to these guarantees.
The investment decision for TEL and TN was made during an extraordinary general meeting (EoGM) held on August 7, 2025. The development was disclosed in a notice to the Pakistan Stock Exchange (PSX). The investment is by Hub Power Company Limited (HUBCO), Pakistan's largest Independent Power Producer (IPP).
It is important to note that no further details on the timeline or specifics of the investment have been provided. The investment is intended to support the key Thar-based coal projects, reflecting HUBCO’s strategic investment and confidence in Pakistan’s coal-based energy infrastructure.
The standby letters of credit, totaling $51 million, approved by Hub Power Company Limited (HUBCO) for Thar Energy Limited (TEL) and ThalNova Power Thar (TN) are essential to finance their coal power projects. HUBCO's credit facilities will support TEL's operations until January 2034, while TN will benefit from the finance until July 2034. The investment underscores HUBCO's commitment to the energy industry and its confidence in Pakistan's coal-based energy infrastructure.
