HUBCO executes MoU with Govt's Negotiation Committee

August 24, 2020: The Hub Power Company Limited (HUBCO) and the Committee for Negotiations with Independent Power Producers (constituted by the Federal Government), have executed a Memorandum of Understanding (MoU).

Pursuant to terms of the MoU, the Parties have agreed to reduce the existing fixed O&M by 11%, whilst keeping the existing arrangement of US$ exchange rate and US$ CPI on the fixed O&M. At the same time, the Parties agreed to discontinue the US$ Exchange rate and US CPI indexation on the Project Company Equity and fix the same at the National Bank of Pakistan’s TT/OD selling PKR/USD exchange rate prevailing as on21 August 2020.

According to the notice issued by HUBCO (company), the Parties have agreed that payment of the receivables of HUBCO is an integral part of the MoU. The Power Purchaser and the Federal Government will devise a  mechanism for repayment of the outstanding receivables to the company within an agreed time  period,  which will be reflected in the final agreement to be signed. The Parties also agreed that payments shall follow the PPA mandated FIFO principles. Further, as and when the Competitive Trading Arrangement is implemented and becomes fully operational, without prejudice to the terms of its generation license, HUBCO shall support and participate in the same.

The terms of the MoU are subject to the approval of the Board of Directors of the company and the Federal Cabinet, prior to the execution of a final agreement between the parties, the notification said.

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