The Hub Power Company Limited, colloquially known as Hubco, is a Pakistani power company based in Karachi, Sindh. It was the first independent power producer (IPP) established in Pakistan, and currently is the largest IPP in the country. Hubco is listed on the Pakistan Stock Exchange.

History

1991–1998: Initial years

Hub Power Company (Hubco) was founded in 1991. The project was funded by $770 million in loan agreements and $325 million in equity from international investors. The major investors included National Power with 20.4 percent shareholding, Xenel with 14.5 percent, and Entergy with a 10 percent holding. Hubco also raised $175 million through the issuance of global depository receipts (GDRs) on the Luxembourg Stock Exchange, which peaked at $13.25 upon introduction to the market on 5 October, with each GDR consisting of 25 shares. Local investors were allocated approximately 69 million shares valued at $30 million following an initial public offering on the Karachi Stock Exchange at PKR 13.60. Of the $770 million loan, Hubco secured a $686 million, 12-year credit facility organized by Citibank and other major banks on 30 September 1994, which included a $36.9 million concessional loan from the Commonwealth Development Corporation and $465 million from loans facilitated by the World Bank-funded public-sector energy development fund, including $166 million in standby funds at an interest rate of 2 percent plus Libor. The company also obtained a local currency loan of Rs 3,012 million ($98.4 million) on 2 October in Karachi, arranged by the National Development Finance Corporation and involving several Pakistani banks. By 1998, Hubco became the second largest listed company on the Karachi Stock Exchange by market capitalization. Initially, the revenue of the company was denominated in United States dollars. In October 1998, the Nawaz Sharif administration canceled parts of energy purchase agreement with Hubco due to corruption and high energy tariff.

1998–2018: Lawsuits, renegotiation of contracts, and decline

In 2000, Hubco and its investors, including Entergy and National Power, agreed to forgive $200 million of the $274 million debt owed by the Water and Power Development Authority to Hubco. Hubco also reduced its tariffs and operation and maintenance contracts in 2002, reducing internal rate of return from 17 percent to 12 percent. These adjustments were made to manage the remaining $74 million required for loan repayments. Previously, Entergy had filed a lawsuit against WAPDA in the International Court of Arbitration which was withdrawn following a settlement. The lawsuit sought approximately $8 billion in damages over the 30-year life of the independent power project. The claim was filed in response to WAPDA's withdrawal from the power purchase agreement, which was based on allegations of corruption involving former Hubco's business executives. In 2008, Hubco acquired a 75 percent stake in Laraib Energy and initiated an 84MW run-of-river hydroelectric power project downstream on the Mangla Dam. In 2013, Laraib Energy's New Bong Hydropower Plant commenced commercial operation. In 2011, Xenel exited Pakistan and sold its stake of 140 million shares (12.3 per cent) at a price of Rs37 per share. A year later, National Power UK divested its 17.44 percent shareholding to Dawood Hercules and Allied Bank Limited at PKR 31 per share. In 2013, Hubco incorporated its oil-fired Narowal Power Plant as its wholly-owned subsidiary. In 2017, Hubco delisted its GDR from the Luxembourg Stock Exchange due to low trading volumes. In 2018, Mega Conglomerate took over the company.

2018–present: Diversification and termination of contract

In 2019, the China Power Hub Generation Company (CPHGC) commissioned a 1.32GW coal-fired thermal power plant. The $2 billion facility is now fully operational and is owned by CPHGC, a joint venture between Hubco and China Power International. Hubco holds a 74 percent stake in the venture, while China Power International owns the remaining 26 percent. In 2022, Prime International, a joint venture of Hubco, acquired the Italian energy multinational Eni's E&P subsidiary Eni Pakistan. In October 2024, Hubco prematurely terminated its energy purchase agreement for the power station based in Hub with the government of Pakistan amid concerns about coercion and threats of corruption cases against IPP owners if they sought international arbitration.

Group

Subsidiaries

Associates

Operational plants

Other projects