IPPs withdraw sovereign guarantee demand

Move comes after reassurances from government that it will settle outstanding debt

LAHORE: Independent Power Producers (IPPs) have agreed to withdraw the sovereign guarantee encashment demand after the government’s assurance of clearing the outstanding amount it owned.

On March 2, 13 IPPs invoked sovereign guarantees of the federal government to recover unpaid overdue invoices of more than Rs48 billion (out of total outstanding of Rs414 billion) by submitting the final notice to the government through the Private Power and Infrastructure Board (PPIB).

However, the Ministry of Water and Power secretary met with representatives of IPPs last week to settle various issues which included the overdue verified and audited amounts due to IPPs under the Power Purchase Agreement.

“The government has shown the intention that it will settle issues with the IPPs,” said a source inside the ministry. “Hence, based on the assurance, the IPPs have decided to provide all possible support to the government in the context of broader larger national interest.”

The source also said that as a gesture of goodwill, the IPPs have withdrawn the guarantee demand without prejudice to their legal and contractual rights which are not waived. The formal withdrawal has been received by the PPIB.

The IPPs, which had served the final notices for sovereign guarantee included Lal Pir Power (Rs4.552 billion), Pakgen Power (Rs7.778 billion), Kohinoor Energy (2.306 billion), Liberty Power (Rs5.361 billion), Nishat Power (Rs4.881 billion), Attock Gen Ltd (Rs4.449 billion), Atlas Power (Rs4.555 billion), Nishat Chunian Power (Rs4.16 billion), Hubco Narowal (Rs5.024 billion), Saif Power (Rs1.503 billion), Sapphire Electric (Rs1.396 billion), Orient Power (Rs1.18 billion) and Halmore Power GCL (880 million).

Published in The Express Tribune, May 6^th, 2017.

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