Thar Block II Coal Mining Project

1. Thar Block II Coal Mining Project Indigenous Fuel is the Key to Energy Security of Pakistan Khalid Mansoor, Oct 22, 2011

2. Pakistan’s Power Demand-Supply Forecast Peak Demand Average 3% Growth rate based on GDP & Population Growth Supply Average 2% Growth rate assumed Daimer – Basha Dam (4500 MW) Thar Coal (1200 MW) Only plants that have achieved or are likely to achieve financial close included in the supply forecast

3. Impact of Energy Crisis Electrification Rate : 56% Supply Shortfall : 1100 – 5000 MW Power Outage per day : 8 – 16 hours / day Source: State of the Economy – Emerging from Crisis 2008, Beacon House National University publication

4. Wrong Fuel Choice • Due to lack of indigenous natural gas shortages, reliance on expensive imported RFO has increased and exacerbated Circular Debt problem • If Coal had been used instead of RFO to make up for indigenous natural gas shortage, it would have reduced energy import bill by USD 600 M and direct saving of USD 280 M to electricity consumers • 50% reduction in use of RFO for power generation would reduce Pakistan’s energy import bill by USD 900 M and benefit electricity consumers by USD 400 M • Existing RFO based power plants can be retrofitted to operate on local coal thereby reducing the fuel cost & eventual power tariff significantly Source: 1) State of Industries Report 2010, NEPRA 2) Integrated Energy Plan

5. Thar Dream Promises Better Life Tomorrow for all Pakistanis!

6. Salient Features of Thar Coal Mining & Power Project • Sindh Engro Coal Mining Company (SECMC) is a joint venture company between Engro Powergen Ltd. (60%) and the Government of Sindh (GoS) (40%) with a vision to: “Develop a technically and commercially viable Coal Mining Project in Thar Block II to generate electric power using indigenous lignite and bring energy security to Pakistan” • GoS is responsible for coordination with Federal & Provincial Governments for obtaining relevant approvals and timely delivery of infrastructure including water supply, roads, transmission line and effluent disposal etc • Engro Powergen is responsible for development, financing, execution management & operations of the Projects • Total Lignite reserve in Block II is 2 Bt, which can support 5,000 MW for ~50 years • SECMC plans to develop integrated Mining & Power Projects of 6.5 Mt/a and 1,200 MW capacity respectively which will eventually be scaled up to a 22.8 Mt/a Mine and 4,000 MW Power Plant PROJECT STATUS : • Technical, environmental and social viability of the Project has been confirmed in Detailed Feasibility Study meeting all international standards (IFC/World Bank, ADB, etc.) • Average lignite quality : (Heating Value ~ 5000 Btu/lb , Ash 7.3 %, Moisture 47.48 %, Sulphur 1.1 %), Seam Thickness 32 m • Firm cost effective Engineering Procurement & Construction (EPC) proposals have been finalized with leading Chinese company for Mining & Power generation projects on turnkey basis • Mine construction is targeted to start by 2013 & lignite production/Power generation by 2016 • SECMC in coordination with Chinese EPC firm, held meetings with Chinese Financial Institutions/Minister of Energy under the platform of Joint Energy Working Group, to explore the financing options for Thar Block II Projects • Chinese Financial Institutions/Energy Ministry showed interest in Financing the Projects owing to its significance for energy security of Pakistan and readiness of EPC Proposals

7. Benefits of Thar Coal Development • To overcome the current energy crisis, Pakistan has no other alternative except development of indigenous energy resources • Investment in Thar Mining & Power projects will provide the following benefits : • Strategic energy resource that will guarantee energy security to Pakistan in the decades to come • Import substitution of expensive RFO or Natural Gas – Due to import substitution benefits, Thar mining will act as a direct “foreign exchange earning sector“ and help lower the adverse impact of imported fuel on Pakistan’s Trade Balance • Lower power tariff for Coal fired Power Plants as compared to RFO based power tariff • Socio-Economic Development of Thar region • Presently Thar District ranks lowest on all socio-economic development indicators in Sindh • Development of indigenous coal mining industry will lead to skilled job creation and transfer of technology • Potential for future downstream industries in Petro-chemical and Fertilizer products Thar Coal is a fortune turning opportunity for Pakistan

8. ThankYOu

9. Engro Corp at a Glance • Engro was founded in 1964 as Joint Venture between Esso and Government of Pakistan to setup a first Urea plant in Pakistan

10. Period Total Assets Turnover 2009* 1,560 690 2010 1,940 940 Engro Group Snapshot Consolidated Financial Performance Total Assets (USD M) All amounts in USD M Profit After Tax 44 Turnover (USD M) 80 * Including eliminations due to intra company usage of assets etc • Double digit earning growth since 1995 • Currently has long term credit rating of AA from Pakistan Credit Rating Agency • Recently completed World Biggest Single train Urea Plant • Investments from 2007 to 2010 amounted to over USD 1.6 Billion • Fertilizer(USD 1.1B), PVC (USD 260M), Foods (USD 200M), Chemical handling (USD 35M), Industrial Automation (USD 10M), Power (USD 200 M) Profit After Tax (USD M)

11. Bankable Feasibility Study Consultants SECMC RWE-Germany Owner‘s Consultant RWE-Germany SINOCOAL Intl. China North East Coal Bureau (NECB) China SGS Pakistan SRK-UK / Hagler Bailly Pakistan Sampling/Coal Analysis Contractor Hydrological Model & GW Abstraction Consultant Bankable Feasibility Study Consultant Hydrological Field Work Contractor ESIA* Consultants DRD-Pakistan Drilling Work Sub-contractor • * Environment and Social Impact Assessment