Thar Mine Expansion Meets Circular Debt: The Phase-III Financing Bind

In October 2024 the Sindh government warned publicly that the expansion of the Sindh Engro Coal Mining Company's Block-II mine at Thar was stuck short of financial close. Business Recorder reported that the mine produced about 7.6 million tonnes a year for Engro Powergen Thar, Thar Energy and ThalNova, and that the expansion would take it to 11.4 million tonnes, partly to supply Lucky Electric. The expansion is a 50 per cent increase in output (11.4 divided by 7.6).

The survey records the policy context: a moratorium on new imported-fuel power projects since 2016, and an effort to start blending Thar coal at three CPEC imported-coal plants totalling 3,960 MW. Each tonne of lignite used instead of imported coal saves foreign exchange. Reporting cited a Meezan Bank term sheet for local financing, but consents from the Chinese lenders to earlier phases are still needed because of cross-default and security arrangements. We would treat payments for Thar coal as a priority within the circular-debt plan.