Govt settles Rs142bn dues with IPPs

July 05, 2023 (MLN): The Government of Pakistan has made a significant payment of Rs142 billion to Independent Power Producers (IPPs) to settle outstanding dues on June 27, 2023.

The Economic Coordination Committee (ECC) of the cabinet on June 21, 2023, had approved Rs4bn in funding to be released on a monthly basis to IPPs.

The government had also paid Rs385bn to IPPs of PP 1994 and PP 2002 last year.

Port Qasim Electric Power Company Ltd (PQEPC), which runs a $1.9bn power plant of 1,320 megawatts on imported coal, had served a formal notice of payment default on the Central Power Purchasing Agency (CPPA) on May 31, 2023.

The company was paid Rs8.32bn.

Engro Powergen Thar Ltd, which operates a $995.4m power plant of 660MW on local coal was paid Rs4.31bn.

Engro Powergen Thar Ltd had earlier told the CPPA that it may shut down operations entirely because of a “severe liquidity crunch” that has made it challenging for the IPP to settle its liabilities with both lenders and suppliers.

National Power Parks Management Company Private Limited received the highest share from the Rs142bn total, with two payments totaling Rs22bn (Rs9bn and Rs13bn).

Similarly, China Power Hub Generation company (Pvt.) Ltd received Rs9.21bn, and Karachi Nuclear Power Plant-Unit-2 was paid Rs8.75bn.

Full breakup of payments:

Amount in USD Million

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