NEL executes amendment agreement with government, CPPA

March 05, 2025 (MLN): Narowal Energy Limited (NEL), a wholly owned subsidiary of the Hub Power Company Limited (PSX: HUBC), has executed an Amendment Agreement on February 14, 2025, with the Government of Pakistan (GOP) and the Central Power Purchasing Agency (Guarantee) Limited (CPPA).

The agreement, initiated upon the request of the Task Force under the Prime Minister's Office, aims to revise the tariff and transition to a 'Hybrid Take and Pay' model, the company's filing on PSX revealed today. 

Some salient terms and conditions are as under:

• The Amendment Agreement shall be effective from November 1, 2024.
• Indexation mechanism of O&M has been changed.
• Tariff of Cost of working capital and O&M have been revised.
• Return on Equity tariff component will be paid in a hybrid take and pay mode.
• Insurance premium tariff is capped at 0.9% of EPC Cost.
• GOP will unconditionally withdraw Arbitration under Arbitration Submission Agreements.
• CPPA will make the payment of outstanding receivables as of October 31, 2024 within 90 days of approval of the Agreement by the Cabinet.
• Waiver of outstanding Late Payment Interest as of October 31, 2024; and  and
• LCIA Arbitration clause in PPA will be substituted with Islamabad seated Arbitration under the local laws.

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