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Major Acquisition in Pakistan's Energy Sector as Engro Energy Sells Coal Business for $125 Million

Hussain Dawood's Engro sells coal business for $125 million, marking a major shift in Pakistan's energy sector.

By Mackenzie Crow

4/4, 09:13 EDT

Key Takeaway

  • Hussain Dawood's Engro Energy sells its coal mining and power generation business for 34.75 billion rupees ($125 million) to Liberty Power Holding Pvt.
  • The sale marks one of Pakistan's largest energy sector acquisitions, aligning with Engro's strategy to optimize capital and focus on strategic areas.
  • This move reflects Pakistan's significant engagement in the Belt and Road Initiative, showcasing deep investment ties with China in infrastructure and energy.

Major Acquisition in Pakistan's Energy Sector

Pakistani business magnate Hussain Dawood's Engro Energy has completed the sale of its coal mining and power generation business, marking a significant transaction in the nation's energy sector. The deal, valued at 34.75 billion rupees ($125 million), was made with Liberty Power Holding Pvt. and a consortium of three partner companies. This sale is noted by Karachi-based brokerage house Topline Securities as one of the largest acquisitions in Pakistan's recent history. Engro Energy's involvement in coal mining and power generation has been pivotal in providing affordable energy in Pakistan over the last five years.

Engro's Strategic Shift

The divestiture of Engro's thermal unit is part of a broader strategic realignment. Engro, one of Pakistan's largest conglomerates with interests spanning fertilizer manufacturing, chemicals, and telecoms, aims to optimize capital and resource allocation through this sale. The company's decision to sell its thermal assets follows the 2018 sale of subsidiary Hub Power Co., which operates a 1,200-megawatt oil-fired power plant. This move reflects Engro's ongoing efforts to refine its portfolio and focus on areas of strategic importance.

Engro and the Belt and Road Initiative

Hussain Dawood has been a key figure in leveraging Pakistan's coal reserves, among the world's largest lignite coal deposits, through the Belt and Road Initiative (BRI) spearheaded by Chinese President Xi Jinping in 2013. Pakistan has been a primary beneficiary of China's infrastructure export drive under the BRI, with completed projects totaling $25 billion. These projects encompass power plants and various other infrastructural developments, highlighting the significant investment and collaboration between Pakistan and China in the energy sector.