September 14, 2021 (MLN): The Cabinet Committee on Energy (CCOE) has directed the Power Division to proceed payments to eleven IPPs, under the 2002 Power Policy (PP) as per mechanism agreed earlier between the government and IPPs.
According to the mechanism, the 40% of outstanding amount consists of 33.3% Cash, 33.3% SUKUK and 33.3% Floating PIBs to be paid as first installment. While the 60% of outstanding to be paid after six months.
To recall, in Jun 2021, the government paid the first instalment, 40% of Rs89.9bn to the IPPs of 1994 and Pre 1994 policies. However, for 2002 power policy plants, the government withheld the payment due to matter of excess profits which was under NAB investigation.
The approval by CCOE will ease off the liquidity position of IPPs under Power Policy 2002 significantly.
As per the estimations reported by Arif Habib Limited (AHL), Nishat Power Ltd (NPL) is expected to receive the highest amount of Rs7.40bn followed by Narowal Energy Ltd (NEL), a subsidiary of HUBC which is likely to receive Rs7.2bn. Saif Power Ltd (SPWL) and Engro Powergen Qadirpur Ltd (EPQL) are expected to receive Rs4.88bn and Rs3.91bn, respectively.
To note, the payment to NCPL is still withheld due to matter of excess gain is under NAB investigation.
