Featured Revised IPP deal likely to win CCoE nod today

[Patriot forever]

it has , but the tarriff regime is still CAPACITY based



someone please correct me here ?


sir if capacity payment tarriff regime remains, then there is no point of this exercise

PM should look into this do-numbri

Bro the article is not very informative regarding capacity payment. The only relevant information in the article regarding capacity payments is

IPP's under 1993 policy.

'This group of IPPs had agreed to remove 50 per cent US dollar indexation on reduced capacity'
'11 per cent reduction in capacity purchase price and variable O&M of this group'

The agreement is in rupees and there is saving for the government unless the rupee goes below 130 (which is highly unlikely).

IPP's under 2002 policy.

Nothing relevant is mentioned regarding capacity payments. In my opinion they have converted the contracts into rupees at 148 and converted capacity payments to take and pay in exchange for an overall increase in fixed ROI from 15% to 17%.
Again dollar indexation is removed and the payment is fixed at Rs 148 ( the agreement will hold as long as the rupee remains under 168).

But please do keep in mind the majority of our current capacity payments is for IPP's under 2015 policy. The share of IPP's under 1993 and 2002 policy is low, the total amount of expected savings is 860b Rs over 10 years as of now (this includes the closure of 4000MW of inefficient plants). If we manage to successfully negotiate with IPP's setup under CPEC the collective savings will be huge.

A lot of details will come with the passage of time. And yes we (government) wanted is one extreme, IPP's contracts were at the other extreme. A mutual understanding will always be in the middle.

The IPP's contracts signed previously are legally binding and can easily be defended in any international court by IPP's, these IPP's always had the advantage in these negotiations. We are salvaging what we can. Sofar so good.

Please correct me if I am wrong, information out right now is scant.

 

[ziaulislam]

sadly payments are still in dollars for some bleeding reason I don't know why.

Because loans are in $$

Otherwise govt will devalue & problem solve

Issue is ROR & capacity payments

Bro the article is not very informative regarding capacity payment. The only relevant information in the article regarding capacity payments is

IPP's under 1993 policy.

'This group of IPPs had agreed to remove 50 per cent US dollar indexation on reduced capacity'
'11 per cent reduction in capacity purchase price and variable O&M of this group'

The agreement is in rupees and there is saving for the government unless the rupee goes below 130 (which is highly unlikely).

IPP's under 2002 policy.

Nothing relevant is mentioned regarding capacity payments. In my opinion they have converted the contracts into rupees at 148 and converted capacity payments to take and pay in exchange for an overall increase in fixed ROI from 15% to 17%.
Again dollar indexation is removed and the payment is fixed at Rs 148 ( the agreement will hold as long as the rupee remains under 168).

But please do keep in mind the majority of our current capacity payments is for IPP's under 2015 policy. The share of IPP's under 1993 and 2002 policy is low, the total amount of expected savings is 860b Rs over 10 years as of now (this includes the closure of 4000MW of inefficient plants). If we manage to successfully negotiate with IPP's setup under CPEC the collective savings will be huge.

A lot of details will come with the passage of time. And yes we (government) wanted is one extreme, IPP's contracts were at the other extreme. A mutual understanding will always be in the middle.

The IPP's contracts signed previously are legally binding and can easily be defended in any international court by IPP's, these IPP's always had the advantage in these negotiations. We are salvaging what we can. Sofar so good.

Please correct me if I am wrong, information out right now is scant.

Whats funny is that PMLN supporters will say rate has NOT been reduced enough and had it been khaqqan abbasi rate would have been reduced more

Makes me wonder how is pakistan still there..it is truely a miracle

 

[Patriot forever]

Pakistan to Seek Debt Relief From China Belt and Road Loan
By
Faseeh Mangi
February 9, 2021, 3:27 AM ESTUpdated on February 9, 2021, 7:14 AM EST

• China-financed power plants in Pakistan resulted in oversupply
• Relief part of Pakistan’s plan to reduce power payments

Pakistan plans to ask China for relief on payments for power projects Beijing financed over the past eight years, the latest developing nation that’s struggling to repay debt under President Xi Jinping’s Belt and Road Initiative.

In informal talks, Pakistan and China have discussed easing terms on the repayment of debt on about a dozen power plants, according to a person with knowledge of the matter, who said Islamabad hasn’t made a formal request yet. The parties have canvassed Beijing’s willingness to stagger debt payments, as opposed to lowering equity returns, the person said, requesting anonymity as the plan is private.

An enormous build-out of Chinese-financed power plants in Pakistan, which was originally intended to solve its electricity shortages, has resulted in a surplus that Islamabad isn’t able to afford. Infrastructure projects funded by China’s initiative in other developing nations, such as Sri Lanka and Malaysia, have suffered issues ranging from heavy debt loads to corruption.

A spokesperson at China’s Ministry of Foreign Affairs said they aren’t aware of Pakistan’s plan to seek debt relief.

“Energy projects have provided Pakistan with a large amount of stable and low-priced electricity, effectively reducing the overall price of electricity in Pakistan,” the spokesperson said in a written response. “China-Pakistan energy cooperation has progressed smoothly and brought about real economic and social benefits.”

Pakistan’s power division didn’t respond to a request seeking comment.

China has previously denied U.S. criticism that the initiative leads to debt traps, while acknowledging that countries have had difficulties repaying loans due to the pandemic-induced global recession. Last year, Beijing canceled interest-free loans to 15 African countries due to mature by the end of 2020, and it has delayed other payments.

The Belt and Road program had found new life in Pakistan last year with the signing of $11 billion worth of projects, most of which went to revamping the nation’s railway system

While Chinese financing has helped Pakistan diversify fuel supplies, it has also resulted in a surplus of electricity, which is problematic for the government in Islamabad because it is the sole buyer and pays producers even when they don’t generate. To help tackle the issue, the government has negotiated with power plants, which produce roughly half of its electricity, to lower rates.

Pakistan will formally make the request to defer debt payments to China, as well as other plants that were part of the latest power policy, after it concludes deals with those local power producers to reduce electricity tariffs, said the person with knowledge of the matter. Debt relief from China will also help the government reduce power payments.

— With assistance by Lucille Liu, and Jing Zhao

Bloomberg - Are you a robot?

https://twitter.com/x/status/1359074216168083458

 

[Ahmet Pasha]

wtf has changed ?

The bagar billas who have been assigned to guard milk and skim the cream from top.