Hubco seeks extension of coal plant guarantees

Hub Power (Hubco), the country’s largest independent power producer, said on Wednesday it was seeking an extension to $51 million in bank guarantees to protect its coal-fired power plants, a crucial source of stable power amid Pakistan’s rising use of solar. The guarantees, previously short-term, would now stay in place until 2034 to cover future loan repayments and potential penalties, the company said in a notice to the country’s stock exchange. New government-imposed transmission charges, which Hubco is contesting and says were not included in its original contracts, have pushed investors to seek extended guarantees. The cost of borrowing to provide these guarantees would remain below the expected returns from the projects, it said.