(MENAFN- Khaleej Times)Business giant plans to raise $1.5 billiion for mega power projects in Pakistan.
Dubai: Pakistan’s Nishat Group plans to raise around $1.5 billion for big power projects in Pakistan and also looks to expand its banking operations to India Afghanistan Africa and Azerbaijan chairman Mian Mohammad Mansha told Khaleej Times during an interview in Dubai.
Nishat Group is one of the leading and most diversified business groups in Southeast Asia with fixed and current assets of over $5 billion it ranks amongst the top five business houses of Pakistan.
The group has a strong presence in three most important business sectors of the region — textiles cement and financial services. In addition the group also has reasonable market share in insurance and power generation among others.
The group had already raised $1 billion in 2008 as Maybank of Malaysia bought a 20 per cent stake in the group’s MCB Bank Mansha said adding that the group will need to raise money for its big power projects and will contribute between 30 to 40 per cent as equity. “If we go into the big power plants we will be looking into coal-based projects” the chairman said. Citing restrictions by the IFC and World Bank on coal-based power projects he said: “We have to come to these [UAE] markets to raise money.”
Mansha didn’t provide any timeframe and number of power projects but said: “I think at least $1.5 billion [will be raised] if we go through all of our plans. We will contribute our part of equity.”
The projects will supply power to the national grid he added.
Pakistan faces acute power shortage as there is a big gap between demand and supply. The federal government in its latest budget for fiscal year 2015-16 has allocated Rs248 billion for the power sector compared to Rs200 billion in the previous budget.
Some large projects that would be part of allocations for 2015-16 include the Dasu Power Project which will produce 2160MW power (Rs52 billion); land acquisition and construction of Diamer-Bhasha Dam that will produce 4500MW of electricity (Rs21 billion); the Neelum-Jhelum Hydro Power project having a capacity of 969MW (Rs11 billion); and the completion of the Tarbela-IV Extension Hydro Project with a capacity of 1410MW (Rs11 billion).
Talking about the group’s interest in the UAE Mansha said that Nishat Group has an insurance business and retail business in the UAE. “We also have a partnership with Abu Dhabi Investment Group. We do many businesses in this area” he added.
The group is also involved in real estate shopping malls and hospitality industry but Mansha said no real estate and hospitality project is under consideration for the UAE.
Banking expansion
The group’s MCB Bank has more than 1240 branches in Pakistan and its overseas operations include seven branches in Sri Lanka one in Bahrain and one in Azerbaijan.
Last Thursday MCB bank opened its first wholesale banking branch in Dubai. It already had a representative office since 2008.
Mansha mentioned that MCB Bank will be among the first three banks to open three branches in India in Mumbai New Delhi and Amritsar. Regulators in both the countries have approved and only the government’s nod is required he added.
Talking about other markets for banking expansion he said: “We are looking at Afghanistan and then Tanzania because we want to have a hub in Africa.”
He mentioned that Iran will be a big opportunity for everyone and Nishat Group if sanctions lifted. “Obviously the big thing that we all are looking at is that if the sanctions are lifted on Iran there will be plenty of opportunities in the region.”
Talking about the banking industry in Pakistan he said that the industry is robust. “The problem I see all over the world there are not many long-term big shareholders in banks. That’s the problem.”
Mansha claimed that MCB Bank’s balance sheet is one of the 10 best balance sheets in the world. He mentioned that the China economic corridor is a big thing that will bring $46 billion into the country and the banking industry will also benefit from the corridor.
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