Islamabad June 04 2021: The first payment transaction, approved by the Government of 40% to 20 IPPs amounting to PKR89.2 billion have been completed in coordination with SBP and Power Division. The payment is made after the normal working hours.
IPPs established pre 1994 Power Policy (Hub Power Company and KAPCO) get the major chunk of the payment as they received PKR62.8 billion. Hub Power received payment of PKR23.2 billion while an amount of PKR39.6 billion is credited to the account of Kot Addu Power Company.
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IPPs established under 1994 Power Policy received PKR22.9 billion in aggregate. Pakgen Power Power in 1994 Power Policy received the highest amount of PKR16.3 billion followed by PKR15.4 billion of Lalpir Power. Rouch Power, a subsidiary of Altern Energy, account is credit with amount of PKR5.6 billion while Kohinoor energy has received PKR2.0 billion. Fauji Kabirwala, a subsidiary of Fauji Foundation received just PKR1.8 billion while Saba Power received PKR0.7 billion, the lowest among 1994 Power Policy IPPs.
Moreover, renewables received a mere amount of PKR4.2 billion out of which PKR1.4 billion goes to FFC Energy Limited. FFC Energy is 100 MW wind power plant of Fauji Fertilizer Company.
In the first installment IPPs have received 40 percent of total overdue receivables as on November 30 2021. The residual amount of 60 percent will be paid in six months after the signing of agreement.
Independent Power Producers received above stated amounts in the mode of one third in cash, one third in the form of floating Pakistan Investment Bonds (PIBs) of 10 Years maturity and remaining in the shape of five year Sukuks.
As a result of payment, the burden of capacity payments or fixed costs the government pays to IPPs under their ‘take or pay’ power purchasing agreements would be reduced. This will help to lower the burden on consumers equivalent to PKR800 billion during the period of next 30 years. IPPs established under pre 1994 power policy and 1994 power policy had also agreed for termination of their Power Purchase Agreement against onetime compensation.