Govt agrees to pay Rs45b to IPPs by mid-October
Power producers withdraw notices after government assurance.
ISLAMABAD:
Independent power producers (IPPs) have withdrawn notices served on the government and Central Power Purchasing Agency (CPPA) to invoke financial guarantees after the government pledged to pay Rs45 billion to them by October 14.
“The government has agreed to release Rs8.5 billion to nine IPPs by the end of the current month and the remaining amount will be cleared by October 14, out of total dues of Rs45 billion,” Abdullah Yousuf, Chairman Independent Power Producers Advisory Council, told The Express Tribune.
Yousuf said after government’s assurance, the IPPs had withdrawn notices that were served after the government defaulted on payments for power purchase.
He said the government had to pay Rs210 billion to all IPPs, adding it had restored routine payments that were stopped earlier.
According to a statement issued by the Ministry of Water and Power, nine IPPs have withdrawn the notices served on the power purchaser with immediate effect due to efforts made by the ministry with active support of other stakeholders.
The nine IPPs are Atlas Power, Attock Gen, Halmore Power, Liberty Power Tech, Nishat Chunian, Nishat Power, Orient Power, Saif Power and Sapphire Electric Company.
Earlier, detailed deliberations were held between Water and Power Minister Naveed Qamar, representatives of Pakistan Electric Power Company (Pepco), Private Power and Infrastructure Board (PPIB) and IPPs to find a way out so that the power plants could remain operational and were able to service their debt before the end of September.
All stakeholders agreed that normal daily payments to the IPPs will be restored forthwith so that they are able to service their debt on or before September 29. It was also agreed that the IPPs would withdraw their notices forthwith and the power purchase agreements with the IPPs under Power Policy 2002 would remain intact. They also decided that the government on or before October 15 would pay or procure payments of all outstanding amount, less amount paid until October 14.
PSO needs Rs15b today
However, the cash-strapped Pakistan State Oil (PSO), a fuel supplier to power companies, is facing a critical situation because of default on payment by power producers. PSO requires Rs14.7 billion today (Friday) to retire Letters of Credit (L/Cs) opened to import oil from international suppliers.
PSO, in its letter sent on September 9 to water, finance and petroleum ministries, had requested them to immediately arrange Rs50 billion to prevent the company from default.
“Now, PSO will try to save itself from default by converting L/Cs into loans, which will increase its financial cost, putting an additional burden on the company,” a source in the Ministry of Petroleum and Natural Resources said, adding the same situation would arise next week as PSO had reached borrowing limits of banks.
Published in The Express Tribune, September 16th, 2011.
Independent power producers (IPPs) have withdrawn notices served on the government and Central Power Purchasing Agency (CPPA) to invoke financial guarantees after the government pledged to pay Rs45 billion to them by October 14.
“The government has agreed to release Rs8.5 billion to nine IPPs by the end of the current month and the remaining amount will be cleared by October 14, out of total dues of Rs45 billion,” Abdullah Yousuf, Chairman Independent Power Producers Advisory Council, told The Express Tribune.
Yousuf said after government’s assurance, the IPPs had withdrawn notices that were served after the government defaulted on payments for power purchase.
He said the government had to pay Rs210 billion to all IPPs, adding it had restored routine payments that were stopped earlier.
According to a statement issued by the Ministry of Water and Power, nine IPPs have withdrawn the notices served on the power purchaser with immediate effect due to efforts made by the ministry with active support of other stakeholders.
The nine IPPs are Atlas Power, Attock Gen, Halmore Power, Liberty Power Tech, Nishat Chunian, Nishat Power, Orient Power, Saif Power and Sapphire Electric Company.
Earlier, detailed deliberations were held between Water and Power Minister Naveed Qamar, representatives of Pakistan Electric Power Company (Pepco), Private Power and Infrastructure Board (PPIB) and IPPs to find a way out so that the power plants could remain operational and were able to service their debt before the end of September.
All stakeholders agreed that normal daily payments to the IPPs will be restored forthwith so that they are able to service their debt on or before September 29. It was also agreed that the IPPs would withdraw their notices forthwith and the power purchase agreements with the IPPs under Power Policy 2002 would remain intact. They also decided that the government on or before October 15 would pay or procure payments of all outstanding amount, less amount paid until October 14.
PSO needs Rs15b today
However, the cash-strapped Pakistan State Oil (PSO), a fuel supplier to power companies, is facing a critical situation because of default on payment by power producers. PSO requires Rs14.7 billion today (Friday) to retire Letters of Credit (L/Cs) opened to import oil from international suppliers.
PSO, in its letter sent on September 9 to water, finance and petroleum ministries, had requested them to immediately arrange Rs50 billion to prevent the company from default.
“Now, PSO will try to save itself from default by converting L/Cs into loans, which will increase its financial cost, putting an additional burden on the company,” a source in the Ministry of Petroleum and Natural Resources said, adding the same situation would arise next week as PSO had reached borrowing limits of banks.
Published in The Express Tribune, September 16th, 2011.