ECC restores 4.7 cents/kWh levelised tariff

The Economic Co-ordination Committee (ECC) of the Cabinet has restored the levelised tariff of 4.7 cents per kWh offered in 1995 Power Policy--beyond 25 years.
"The New Bong Hydropower Project be given levelised tariff in accordance with 1995 hydel power policy as Letter of Support (LoS) has already been issued. This principle should also apply for those projects which approached the government to set up projects under the same policy," said the ECC in its decision on the summary submitted by the Ministry of Water and Power.
The revised tariff has been restored with consistent efforts of 84 MW New Bong Escape Hydropower Project sponsored by Laraib Energy Limited and situated at Mangla, Azad Kashmir.
The project will be financed by Asian Development Bank (ADB) and Islamic Development Bank (IDB).
The levelised tariff, which has been restored after 12 years, would also be applied on Rajdhani, Kohala and Matiltan hydropower projects, having power generation capacity of 1000 MW.
The background information suggest that Laraib Energy Limited was issued LoS on December 10, 1995 by AJK government, envisaging a levelised tariff of 4.7 cents per unit, but in the light of a decision taken by the Council of Common Interests (CCOI) on December 27, 1997, Wapda had been asked to re-negotiate tariff with Laraib and Iqbal Power Limited, reducing it to 3.103 cents per unit (excluding water usage charges).
After successful negotiations, Laraib signed MoU with Wapda on December 15, 2001 and Power Purchase Agreement (PPA) with National Transmission and Dispatch Company (NTDC) in April 2004.
The National Electric Power Regulatory Authority (Nepra) conveyed provisional approval of PPA to the firm in August last year but the firm again approached the government and argued that the project was not feasible due to increase in project cost.
Consequently, the proposal was discussed at a board meeting of PPIB, attended by the Prime Minister''s Advisor on Energy, Secretaries, Petroleum, Water and Power, BoI, Additional Secretary Finance (CF), Chairman Wapda and other private sector members wherein it was decided to restore the levelised tariff, offered to the investors under power policy of 1995.
The board decided to place the matter before the ECC for final decision, which restored the tariff on Friday.