ISLAMABAD: The Punjab Thermal Power (Pvt) Limited (PTPL) is expected to file tariff modification application with Nepra for its power plant aimed at reduction in capacity charges in the light of a Cabinet Committee on Energy (CCoE) decision.
Chief Executive Officer (CEO) of PTPL, Akhtar Hussain Mayo, in a letter to the Federal Government has stated that the power project is being financed through combination of debt and equity whereas debt portion is arranged from the consortium of banks and equity is injected into the project by Government of Punjab (GoPb) being the sponsor of the project.
He maintained that after strenuous efforts of GoPb, PTPL has signed financing agreements with a consortium of banks to arrange debt portion of funding for the project and pursuant thereto PTPL is required to obtain prior consent from the banks for any modification in its Nepra’s determined tariff. In order to implement federal government’s decision for the reduction in capacity charge of government-owned power projects (reduction in Return on Equity (RoE)), PTPL/Energy Department has already initiated a process to obtain approval from GoPb (matter was presented before the Chief Minister, Punjab and Standing Committee of Cabinet on Legislation and is now being presented before the provincial cabinet for its consideration and approval).
In terms of the financing agreements signed with banks, PTPL also requested banks for their consent to file a tariff modification application, and the request is actively being pursued with banks. Once approval from the provincial cabinet and banks is received, being a legal requirement, PTPL will submit its application for modification of its tariff with Nepra without any delay.
The project has already suffered delays owing to delay in signing of concession agreements by the federal government entities, which has adversely impacted on the project’s financial close and its completion timelines and costs. Nevertheless, PTPL with the help of federal government and provincial government is making utmost efforts to safeguard the interest of all stakeholders and is trying to achieve its financial close and submission of tariff modification application before Nepra at the earliest possible.
“The project is expected to be completed by end of 2021 and will commence its commercial operations thereafter hence we understand that implementation of the decision may not impact on the project in the near future,” Mayo added.
Copyright Business Recorder, 2021
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