January 7, 2022 (MLN): Independent Power Producer (IPPs) on Thursday received first installment of Rs60 billion, 40% of the total agreed amount of Power Policy 2002 by Power Division, as per media reports.
Accordingly, the payment has been made in terms of 33.3% Cash, 33.3% SUKUK, and 33.3% floating Pakistan Investment Bonds (PIBs).
It is pertinent to mention that the payment to IPPs of the 2002 power policy was delayed due to National Accountability Bureau (NAB) investigations alleging that the IPPs made illegal gains. NAB later on in July 2021 gave its approval for the IPPs payment under the 2002 power policy which paved way for the payment to IPPs, Topline Securities noted in a report.
Initially, the government had approved payment of Rs52bn as 40% of the total agreed amount to 11 IPPs of Power Policy 2002.
Later on, the government also approved payment to Nishat Chunian Power (NCPL), but Rs8bn of NCPL has been withheld till the final award by the arbitrator.
Within the listed space, Engro Powergen Qadirpur (EPQL), NCPL, Nishat Power (NPL), and Saif Power Limited (SPWL) are estimated to receive Rs4.4bn (Rs14 per share), Rs8.1bn (Rs22 per share), Rs7.7bn (Rs22 per share), and Rs5.3bn (Rs14 per share), respectively.
Similarly, Hub Power Narrowal power plant which is on a 2002 power policy is likely to receive Rs7bn.
These IPPs will likely offset payments with their short-term borrowing and trade payables and partially pay dividends, 5-10% of the amount received, the report added.
