France provides 183m euros for energy projects

[sparklingway]

France provides 183m euros for energy projects​

Tuesday, July 27, 2010
By Mehtab Haider

ISLAMABAD: France on Monday unveiled its plan to provide 183 million euros to undertake four projects of 210 megawatt for energy deficient Pakistan in accordance with its commitment made at the Friends of Democratic Pakistan (FODP) forum.

This was disclosed by France Ambassador to Pakistan Daniel Jouanneau on the occasion of signing ceremony of financing agreement worth 26.5 million euros for rehabilitation of the Jabban Hydropower plant in the Malakand division and to finance technical trainings for Wapda engineers.

France had committed to provide 300 million euros to Islamabad during the FODP conference held at Tokyo in April 2009 and after passing more than one and half year period now projects are getting shape for pouring money into the grounds. The FODP had committed to provide $5.2 billion to Pakistan on the basis of which the incumbent regime prepared its budget for 2009-10 depending upon foreign inflows of $2.2 billion.

But the last financial year ended unfulfilled the promises made by donors during the FODP conference, forcing the government to utilize $1.2 billion for budgetary support from the IMF lending money and the remaining gap was bridged through borrowing money from the State Bank of Pakistan.

However, the ambassador said that out of four energy sector projects, two of them would be located in Northern Areas while remaining two would be located in Azad Kashmir. These projects included Bashu hydropower project, Jagran II hydropower project, Jing hydropower project and Fender hydropower project.

Earlier, Sibtain Fazal Halim, Secretary Economic Affairs Division (EAD), Daniel Jouanneau, Ambassador of France and Yves Mayet, Deputy Country Director of the French Development Agency (AFD) signed a financing agreement of 26.5 million euros to contribute to the rehabilitation of the Jabban Hydro-power plant in the Malakand division and to finance technical trainings for Wapda engineers.

As a member of the Group of Friends of Democratic Pakistan, France pledged 300 million euros at the Tokyo ministerial conference last year.Four additional hydropower plants are under study: two by AFD and Wapda in Gilgit Baltistan, 2 in Azad Jammu & Kashmir through the Hydro Electric Board. On this basis, in the near future, AFD’s expected funding in promoting hydro energy in Pakistan will reach about 240 million euros.

 

[Gin ka Pakistan]

Is it a loan or grant ?

 

[TOPGUN]

Perhaps is a grant......

 

[Nishan_101]

no its loan watch today news.....

 

[fatman17]

Power sector circular debt haunts govt

Monday, 02 Aug, 2010

The electricity tariff has been increased by more than 70 per cent since March 2009.

ISLAMABAD: The issue of circular debt of the energy sector is surfacing again after the debt crossed the Rs179 billion mark last week despite instructions given by Prime Minister Yousuf Raza Gilani in April that it should be eliminated within 15 days and Rs301 billion responsibility be transferred to the federal government.

In addition to this, the Pakistan Electric Power Company (Pepco) has informed the federal government that it faced a revenue gap of another Rs256 billion during the current fiscal year.

The circular debt has been increasing despite injection of about Rs71 billion into the Pepco accounts since April 25 when the debt stood at Rs116 billion.

The electricity tariff has been increased by more than 70 per cent since March 2009, translating into over Rs200 billion, the federal government has taken over Rs301 billion debt and parked it in the newly-created Power Holding Company Limited for recovery from tax payers and paid about Rs71 billion to Pepco.

A senior government official said the financial gap stood at Rs179.4 billion on June 30.

According to Pepco, the major reason for the increase in circular debt is the non-payment of electricity bills by the Karachi Electric Supply Company and provincial governments, particularly of Sindh and Khyber Pakhtunkhwa.



The prime minister was informed about this in a presentation “Re-emergence of Circular Debt” by Pepco which sought Mr Gilani’s personal intervention to persuade the two provincial governments to withdraw civil suits filed in the high courts.

The prime minister was informed that KESC was Pepco’s biggest defaulter with Rs40 billion, followed by Sindh with Rs26 billion and Khyber Pakhtunkhwa Rs15.5 billion.

Although Punjab was not in litigation over the dues, it has also emerged as a defaulter with outstanding bills of about Rs9.8 billion, mainly because of its deteriorating financial position.

Sources said Pepco had told the prime minister that none of the 11 measures approved by him at the April 20 energy conference relating to circular debt had been implemented by the federal and provincial governments.

The prime minister had instructed that about Rs115.5 billion Pepco payables be cleared within 15 days.

Pepco informed the prime minister that in about 100 days since then, an amount of Rs70.64 had been paid, leaving behind a debt of about Rs45 billion.

But within this period, fresh bills became due raising the total to Rs179.5 billion.

The federal finance ministry which had taken upon itself the obligation of paying Rs66.4 billion also failed to meet that target and cleared about Rs57 billion. Pepco said the compliance rate of the PM’s instructions was 86 per cent.
The provincial governments promised to pay Rs39 billion, but cleared only Rs3.5 billion, with a compliance rate of only nine per cent.

Pepco blamed KESC for non-implementation of a ministerial committee’s decision relating to issuance of a standby letter of credit (SBLC) for purchase of power from Pepco and “arbitrarily linking Pepco payments to the government of Sindh receivables”, resulting to the piling up of Pepco receivables.

KESC was also accused of under-utilising its generation capacity, failing to clear its past arrears and stepping back from its commitment to clear Rs20 billion by May 2010.

The prime minister was informed that despite the parking of Rs301 billion in Power Holding Company, the gap between power purchased and collections during the last financial year increased by Rs95.5 billion, while the financial gap for the current fiscal year was estimated at Rs256 billion.