Pakistan has promised to release funds to help a power generator obtain the letters of credit (L/Cs) it needs to build an innovative new coal gasification plant.

The finance ministry says it will initially release 900 million Pakistani rupees (Rs900 million-US$10.4 million) for the Thar coal gasification project.

Funding requirement

The project will eventually produce 100 megawatts of electricity by extracting gas from coalfields to produce power.

But the developers need the ministry's funding so that they can open L/Cs for the importation of machinery and equipment for the first phase of the coal gasification project, which is expected to cost Rs9 billion.

Ambitious project

Pakistan expects to start generating electricity through coal gasification by next year in this ambitious and innovative project.

It involves sinking sophisticated equipment into coalfields where no coal is mined, but gas is extracted by innovative plant and machinery.

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