Thar Coalfield is declared as Special Economic Zone, and the projects of development of Thar declared as ‘Projects of National Security’
Rate of Return
20% ($ Based) IRR to firms which achieve Financial Close before 31st December 2015 for Mine & Power Plants based on indigenous coal and additional half a percentage IRR i.e. 20.5% IRR for firms which Financial Close by or before 31st December 2014.
Zero percent customs duties on import of coal mining equipment and machinery including vehicles for site use.
– Exemption on withholding tax to shareholders on dividend for initial 30 years.
– Exemption on withholding tax on procurement of goods and services during project construction and operations.
– Exemption for 30 years on other levies including special excise duty, federal excise duty, WPPF and WWF.
Currency Exchange Rate Protection:
To enable maximum competition from Suppliers and Contractors, the Mining & Independent Power Producers (MIPPs) are protected from the impact of exchange rate variation between US dollars, Euros, Pounds Sterling and Japanese Yen up to Commercial Operation Date (COD).
At the COD, the capital cost be fixed in US dollars based on actual currencies of EPC Contract is acceptable to concerned agencies at the time of tariff determination, sources of financing, payments and actual exchange rates against rupee for the four currencies (US dollars, Euro, Pound Sterling and Japanese Yen) on the relevant dates.
To broaden the access for debt financing, debt can be obtained by MIPP in US Dollar, Pound Sterling, Euro and Yen. This will receive the same treatment as currently available for US dollar denominated debt.
As O&M costs are incurred subsequent to COD, O&M Cost Adjustment will continue to be based on exchange rate variations between Pak Rupee and US dollars.
The Performance Guarantees to Government of Pakistan and Letter of Credits will be accepted in Euro, Pound Sterling and Yen in addition to US$.
In addition to the aforesaid incentives, Coal Based Power Projects and Coal Mining Projects in Sindh shall have the same incentives, concessions, protections and security package as that available to IPPs developed pursuant to Power Generation Policy 2002 (as amended from time to time).