Capacity charges: 33 IPPs were paid Rs 979.3 billion in FY 2023-2024

[Pakistan Space Agency]

Capacity charges: 33 IPPs were paid Rs979.3bn in FY24

• Minister for Energy says existing Power Purchase Agreements allow IPPs to recover its fixed costs including debt servicing through Capacity Purchase Price

Naveed Butt
Published September 13, 2024

ISLAMABAD: Minister for Energy (Power Division) Sardar Awais Ahmad Khan Leghari Thursday said the federal government has paid Rs979.3 billion capacity payment charges to 33 Independent Power Producers (IPPs) during last financial year 2023-24.

In a written reply to a question in the National Assembly, the minister said that Rs137.02 billion has been paid to China Power Hub Generation Company (CPHGC), Rs113.71 billion to Huaneng Shandong Ruyi Energy (Pvt) Ltd, Rs120.37 billion to Port Qasim Electric Power Company (PQEPC), Rs57.32 billion to Lucky Electric Power Company Limited(LEPCL), Rs33.096 billion to ThalNova Power Thar (Pvt) Limited, Rs33.175 billion to Thar Energy Limited, Rs159.9 billion to Thar Coal Block-1 Power Generation Company (Pvt) Limited, and Rs63.423 billion to Engro Powergen Thar (Pvt) Limited.

He said the government also paid Rs23.765 billion to Uch-II Power (Pvt) Limited, Rs7.63 billion to Uch Power Ltd, Rs8.213 billion to Rousch Pak Power Ltd, Rs5.37 billion Halmore Power Generation Company Limited, Rs4.78 billion to Liberty Daharki Power Limited and Rs3.923 billion to Foundation Power Company Daharki Ltd etc.

Probe against IPPs expanded after resistance by some

The minister said Rs106.99 billion has been paid to the power companies; Karot Power Company (Pvt) Limited (Rs75.788 billion), Mira Power Limited (Rs16.005 billion) and Star Hydro Power Limited (Rs15.199). He said that a total of Rs81.6 billion has been paid to other 11 power producer companies.

The minister said the existing Power Purchase Agreements allow the IPPs to recover its fixed costs including the debt servicing through Capacity Purchase Price which is absolutely on the basis of availability of plant for generation. He said the prime minister has constituted a task force to identify and oversee implementation of structural reforms in the power sector of Pakistan, with a view to reduce electricity tariff for the consumers as well the financial burden of the sector borne by the federal government.

Minister for Energy (Petroleum Division) Musadik Masood Malik also told the National Assembly that Pakistan State Oil Company Limited (PSOCL)’s outstanding amount from the Pakistan International Airline (PIA) against jet fuel supplies as of 30th September 2024 has accumulated to Rs29.4 billion (Rs15.64 billion principal and Rs13.4 billion late payment surcharge (LPS)).

In a written reply to a question, the minister said that the PIA is failing to honour payment obligations due to its weak financial and liquidity position. He said that the privatisation of the PIA is in process and the mechanism for clearance of PSO’s outstanding will be decided after it. In another written reply, the Minister for Energy (Petroleum Division) told the house that the total payable of SSGCL stands at Rs1.05 trillion. He said that the OGDCL payable is Rs248 billion; PPL, Rs284 billion; GHPL, Rs150 billion, and Rs176 billion others.

He said the SSGCL’s receivable stands at Rs588 billion including power receivable Rs38 billion; industry, Rs68 billion; domestic, Rs38 billion, and Rs5 billion others, while tariff differential is Rs439 billion.

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[prothought]

These IPP plants cannot even produce electricity for their claimed capacity even if the owners asked by government to do that.

I don’t understand what stops the government from calling their bluff and exposing their fraud by temporarily shutting down a few plants for a month and then asking the other ones to produce electricity at their claimed full capacity for that month.

I am sure they will miserably fail in producing electricity at their claimed capacity. The government then must register criminal cases against the owners and recover all that extra money paid to them for the falsely claimed production capacity.

However, I am sure nothing of that sort will happen because the government officials might be in connivence with those criminals in ripping off this poor nation.

 

[Pakistan Space Agency]

However, I am sure nothing of that sort will happen because the government officials might be in connivence with those criminals in ripping off this poor nation. ...

The Government's Task Force has investigated and reviewed agreements with 31 Independent Power Producers (IPP) so far. The Government has:

• terminated agreements with 5 IPPs, saving the country Rs 411 billion a year (Rs 60 billion annually),
• completed renegotiated agreements with 8 IPPs,
• the remainder 18 are currently in the process of being renegotiated.

 

[Pakistan Space Agency]

IPP deals: Saif Power approves revised agreements with govt
BR Web Desk
Published December 6, 2024

Saif Power Limited (SPWL), an Independent Power Producer (IPP), has approved implementing amended agreements with the government.

The development was shared by SPWL in its notice to the Pakistan Stock Exchange (PSX) on Friday.

“The Board of Directors (BoD) of SPWL has discussed and approved the amendments to Power Purchase Agreement (PPA), Implementation Agreement (IA) and to revise tariff as proposed by the Task Force constituted by the Prime Minister of Pakistan to convert the existing tariff to ‘Hybrid Take and Pay’ to execute amendment agreement with the Government of Islamic Republic of Pakistan and the Central Power Purchasing Agency (Guarantee) Limited to implement the proposed amendments,” read the notice.

The development comes as the government seeks to renegotiate or scrap contracts with IPPs to address financial challenges and streamline the power sector.

Under the terms and conditions of the amendment agreement, the amendment agreement shall be effective from November 01, 2024.

Meanwhile, the indexation mechanism of O&M has been changed, whereas the tariff of cost of working capital and O&M have been revised.

“Return on Equity tariff component will be paid in a hybrid take and pay mode; Insurance premium tariff is capped at 0.9% of EPC cost,” read the notice.

Under the amended agreement, the government will unconditionally withdraw arbitration under Arbitration submission Agreements.

“Payment of outstanding receivables as of Oct 31, 2024, within 90 days of approval of the agreement by the Cabinet; Waiver of late payment interest till Oct 31, 2024; and LCIA Arbitration clause in PPA will be substituted with Islamabad seated Arbitration under the local laws,” read the notice.

Incorporated in Pakistan on November 11, 2004, as a public limited company, the principal activities of Saif Power Limited are to own, operate and maintain a combined cycle power plant having a nameplate capacity of 225 MW (ISO) and sell the electricity to Central Power Purchasing Agency Guarantee Limited (CPPA-G).
Days ago, Nishat Chunian Power Limited (NCPL) approved the implementation of amended agreements with the government.

Last month, Rousch (Pakistan) Power Limited (RPPL) approved the early termination of its long-term agreements with the government and authorised its management to execute a negotiated settlement agreement.

In October, Hub Power Company Limited (HUBCO), Pakistan’s largest IPP, initiated a negotiated settlement agreement with the government.

IPP deals: Saif Power approves revised agreements with govt

Saif Power Limited (SPWL), an Independent Power Producer (IPP), has approved implementing amended agreements with...

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