EPTL seeks Rs30 billion dues from government

Thar-based power firm writes to CPPA-G that it needs to repay its debts at end of May

KARACHI:

The government’s outstanding dues to Engro Power, a coal-fired power generation company in Thar, have reached Rs68 billion, compelling the firm to seek the payment of Rs30 billion of this amount.

Engro Powergen Thar Limited (EPTL) and Sindh Engro Coal Mining Company (SECMC) through an urgent letter to the government's Central Power Purchasing Agency-Guarantee (CPPA-G) has sought the urgent payment of Rs30 billion so that its outstanding dues scheduled at the end of May could be paid.

EPTL Chief Financial Officer Wang Pu said  the amount of the company’s pending payments by the CPPA-G had increased to an alarming level.

The power company is facing a financial crunch because of the lack of payment of its enormous amount of dues.

This is creating more difficulties for the company in making payments to its suppliers and lenders.

In a recent communique, the EPTL CFO, referring to the previous correspondence with the CPPA-G, reminded it that the company had already informed the government about the payment of Rs30 billion due on June 1 this year.

He added that in response to the initial letter dated January 26, only Rs2.02 billion had been paid to the EPTL so far.

The CFO further wrote that the company urgently needed Rs28 billion to avoid defaulting on its loans due on June 1 this year.

He continued that between February and April this year, his company had raised the issue of dues six times with the CPPA-G and demanded emergency payments so that the remaining amount could be paid before the deadline.

According to the letter, the company required Rs30 billion to repay its debts, apart from other regular expenses to run the power plant efficiently, including fuel, operation, maintenance costs, and insurance on which a sum of Rs7 billion was spent every month.

The sum of Rs30 billion being sought by the EPTL immediately is only required to repay its debts.

The amount of Rs7 billion for fuel, operation, maintenance, insurance and other expenses to run the power plant is in addition to this sum.

EPTL was formed in 2014 to set up a 2x330MW power project in Sindh’s Thar Block II.

The project successfully achieved commercial operations date on July 10, 2019.
EPTL is a pioneering project in generating electricity using indigenous lignite coal from the Tharparkar district. It is the first company to have demonstrated proof of concept and successfully produced up to 660MW of electricity linking it to the national grid.