Delay due to govt entities: PPIB to exempt big hydropower projects from fees, charges

ISLAMABAD: The Private Power & Infrastructure Board (PPIB) has decided to exempt 500 or above MW hydropower projects of strategic nature involving foreign direct investment from fee and charges being imposed due to delays attributable to government entities or beyond the reasonable control of the power companies, well-informed sources in PPIB told Business Recorder.

The decision was taken at a recent meeting of the Board, presided over by Secretary Power Rashid Mahmood Langrial.

Managing Director PPIB, who is tipped to be reappointed as MD after approval from the Federal Cabinet, apprised the Board that Kohala Hydro Company Private Limited requested PPIB to grant extension in Financial Closure (FC) date without charging extension fee of $ 300,000.

The Board considered this request in 135th meeting and opined that since the extension is being granted due to the events beyond reasonable control of the Company or attributable to government entities, charging the fee would not be justified, therefore it would be appropriate to exempt payment of fee in such cases. The Board directed PPIB management to initiate appropriate amendment in the said Rules, annexed to working paper.

He further explained that the processing fee is applicable to all Independent Power Producers (IPPs) regardless of the outcome of the issues/ milestones as considerable effort and time is expended to resolve the issues with all stakeholders; therefore, such fee should not be exempted.

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The Board deliberated the premise of charging a reduced/ token fee where delays are not attributable to project companies. After deliberation the Board approved amendment in fee and charges rules 2018, as proposed by PPIB management. DG Law PPIB requested for a change in date in proposed amendment to which the Board concurred.

The sources said for the purpose of Gazette notification, the Board approved draft PPIB (Fee and Charges) Amendment Rules, 2022.

After the proposed change, Rule 3A shall stand substituted with following: “3A. Exemption from payment of fee and charges from and after July 1, 2022; power companies and sponsors shall be exempted from payment of any fee or charges under these Rules in relation to any extension required in the target date of a specific milestone under the LoI solely due to adjustment of its timelines under the Indicative Generation Capacity Expansion Plan (IGCEP) or when any extension in the target date of a specific milestone under the LoS is required in respect milestone under the LoI solely due to adjustment of its timelines under the IGCEP or when any extension in the target date of a specific milestone under the LoS is required, in respect of 500 or above MW hydropower projects of strategic nature involving foreign direct investment, due to delays attributable to government entities or beyond reasonable control of the power companies and sponsors, provided; however, fee and charges under these Rules shall not be exempted when any delay in achieving the target dates of such milestones is also attributable to the power companies and sponsors.”

Copyright Business Recorder, 2023