KARACHI: A Chinese banks-led consortium agreed to provide a financing of $1.5 billion to develop 1,320 megawatts of coal-fired power plants and a jetty in Balochistan.

China Power Hub Generation Company Pvt. Ltd. (CPHGC) and a consortium of banks, led by China Development Bank and the Export and Import Bank of China, signed financing documents, including the main foreign loan facility agreement, in the Chinese city of Chengdu, a statement said on Monday.

The consortium will provide approximately $1.5 billion, which is up to 75 percent of investment in the CPHGC, which is a joint venture project of China Power International Holding Ltd (CPIH) with 74 percent stake and Pakistan?s biggest independent power producer Hubco (26 percent).

CPHGC envisaged two 660MW of imported coal-fired power plants and a dedicated Jetty in Hub, Balochistan with a total estimated cost of two billion dollars.

The project will provide nine billion kilowatt-hour of electricity every year during commercial operations to meet electricity needs of four million households in Pakistan. The project is expected to achieve financial close by this yearend.

Other consortium banks include Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications. Yu Bing, chairman of CPIH said CPIH is committed to the Belt and Road Initiative, and is actively participating in the construction of China-Pakistan Economic Corridor (CPEC).

?CPHGC project is recognised as one of the ?priority projects? under CPEC and it is highly valued by the governments of both sides,? Bing said. ?CPHGC project will effectively ease the situation of Pakistan?s electricity shortage, bring considerable tax income and employment opportunities, improve the local people?s livelihood, continue to promote Pakistan?s economic and social development and political stability.? CPIH has so far provided $300 million as shareholder loan to pay for the project construction. It mainly engages in the development, construction, operation, overseas investment and financing and capital operation of power generation projects.

The company has $18.45 billion worth of assets in 23 provinces of China as well as in Hong Kong and Macao. It has investments in Pakistan, Vietnam and Germany. The total installed capacity of CPIH stood at 28,110MW by end of 2016.

China Development Bank has so far supported 19 projects in Pakistan with a combined worth of around $7.8 billion, covering a number of key areas of cooperation between China and Pakistan.

Since 2006, China Development Bank has loaned $1.7 billion to ministry of finance and $500 million to Habib Bank Limited. Hub Power has a combined power generation capacity of over 1,600MW. The company?s residual fuel oil-fired thermal plant, situated in Hub, supplies net 1,200MW of electricity to the national grid.