20 IPPs paid Rs89.2bn

ISLAMABAD: The government has paid Rs 89.2 billion to 20 Independent Power Producers (IPPs).

This was announced by SAPM on Power and Petroleum Tabish Gauhar in a statement.

"I am pleased to inform that the first payment transaction, approved by the government of 40% to 20 IPPs amounting to Rs 89.2 billion has been completed in coordination with SBP [State Bank of Pakistan] and Power Division.

"This shows our commitment to resolve this longstanding issue on a permanent basis, he added.

According to the proposal approved by the ECC on May 6, 2021 and ratified by the Federal Cabinet in its meeting held on May 18, 2021, the government had pledged to pay 40 per cent of agreed amount as first installment to 35 IPPs. The sources said, minutes of the Federal Cabinet have been received by the Ministry of Energy (Power Division) and Ministry of Finance and paper work is being completed to pay due amounts of 35 IPPs. According to an official statement, Finance Ministry says that in compliance with the directives of the Prime Minister and under guidance of the Finance Minister, the government has completed the first payment transaction of 40% to 20 IPPs amounting to Rs 89.2 billion equally divided in cash 5 years’ Sukuk and 10 years’ PIBs. Finance Division has completed this transaction in coordination with relevant organisations/departments including State Bank of Pakistan and Power Division.

The government had assured the International Monetary Fund (IMF) that payments of Rs 180 billion will be made to 47 IPPs as first installment before May 31, 2021 but this was delayed due to ongoing investigation against 12 IPPs of the 2002 policy. It subsequently delayed the final approval of the Cabinet.

The government has to pay a cumulative amount of Rs 403 billion to 47 IPPs by December 2021. As per the agreement, the government had to pay agreed amounts to the IPPs by March 29, 2021.

The first installment of 40 per cent is duly divided into cash, PIBs and Sukuk and would be adjusted against power sector subsidy claims for the FY 2019-20 and 2020-21. Similarly, disbursement of the remaining 60 per cent will be taken care of in the next financial year.

Power Division has sought a Rs 90 billion supplementary grant to pay 40 percent agreed amount to IPPs established under the Generation Policy 1994 and the Generation Policy pre-1994. The ECC has constituted a committee on this proposal so that a permanent mechanism is devised to ensure payment to the IPPs as per the agreements.

Power Division has also proposed that payments to all IPPs under the Power Policy 2002, which have signed agreements pursuant to MoUs may be withheld till the conclusion of NAB investigation and suspend the process of signing ASA with IPPs under the 2002 Power Policy, and notification of their revised tariff as determined by Nepra till the conclusion of the NAB investigation.

The payment to 12 power projects which have not yet been paid are as follows: (i) Engro Power (gas); (ii) Foundation Power (gas); (iii) Orient Power (gas/RLNG/HSD; (iv) Saif Power (gas/RLNG/HSD; (v) Saphire Electric (gas/RLNG/HSD; (vi) Halmore Power (gas/RLNG/HSD; (vii) Hubco Narowal (RFO); (viii) Atlas Power (RFO); (ix) AGL Power (RFO); (x) Nishat Power (RFO); (xi) Nishat Chunian (RFO); and (xii) Liberty Tech (RFO).

The sources said IPPs established under the 2002 Policy have also approached the "facilitators" and requested them to use their influence on NAB for early issuance of validation letters so that payments are made to them.

Copyright Business Recorder, 2021

Sr# IPPs Amount in Rupees Last Installment IPPS Amount Defaults

1 HUBCO (RFO) 57,981,542,799 23,192,617,120 7,730,872,373 7,730,872,373 7,730,872,373

2 KAPCO (GAS/RLNG & RFO) 99,001,722,986 39,600,689,194 13,200,229,731 13,200,229,731 13,200,229,731 Sub-Total (HUBCO & KAPCO) 156,983,265,785 62,793,306,314 20,931,102,105 20,931,102,105 20,931,102,105

3 ROUSCH (GAS/RLNG) 14,222,855,810 5,689,142,324 1,896,380,775 1,896,380,775 1,896,380,775

4 FAUJI (GAS/RLNG) 4,396,309,563 1,758,523,825 586,174,608 586,174,608 586,174,608

5 PAK GEN POWER (RFO) 16,336,557,217 6,534,622,887 2,178,207,629 2,178,207,629 2,178,207,629

6 LALPIR POWER (RFO) 15,482,757,241 6,193,102,896 2,064,367,632 2,064,367,632 2,064,367,632

7 KEL (RFO) 4,973,642,312 1,989,456,925 663,152,308 663,152,308 663,152,308

8 SABA (RFO) 1,797,875,858 719,150,343 239,716,781 239,716,781 239,716,781 Sub-Total 1994 57,209,998,001 22,883,999,200 7,627,999,733 7,627,999,733 7,627,999,733

9 FFC ENERGY (WIND) 3,454,068,969 1,381,627,588 460,542,529 460,542,529 460,542,529

10 ACT (WIND) 1,631,122,639 652,449,056 217,483,019 217,483,019 217,483,019

11 ARTISTIC ENERGY (WIND) 2,270,227,169 908,090,868 302,696,956 302,696,956 302,696,956

12 HARAPPA (SOLAR) 158,553,602 63,421,441 21,140,480 21,140,480 21,140,480

13 AJ POWER (SOLAR) 67,104,437 26,841,775 8,947,258 8,947,258 8,947,258

14 RYK MILLS (BAGASSE) 523,642,307 209,456,923 69,818,974 69,818,974 69,818,974

15 JDW SUGAR MILLS-Unit-II (BAGASSE) 1,161,075,665 464,430,266 154,810,089 154,810,089 154,810,089

16 JDW SUGAR MILLS-Unit-III (BAGASSE) 880,903,240 352,361,296 117,453,765 117,453,765 117,453,765

17 HAMZA SUGAR MILLS (BAGASSE) 155,072, 781 62,029,112 20,676,371 20,676,371 20,676,371

18 THAL INDUSTRIES CORPORATION 112,415,738 44,966,295 14,988,765 14,988,765 14,988,765

19 AL MOIZ INDUSTRIES LIMITED (BAGASSE) 22,998,881 9,199,552 3,066,517 3,066,517 3,066,517

20 CHANAR ENERGY LIMITED (BASASSE) 8,104,474 3,241,790 1,080,597 1,080,597 1,080,597 Total (Renewable Plants) 10,445,289,902 4,178,115,961 1,392,705,320 1,392,705,320 1,392,705,320 Grand Total 224,638,553,688 89,855,421,475 29,951,807,158 29,951,807,158 29,951,807,158 For PIB For Sukuk

Bank Name   Account #   Bank Name   Account #
HBL IPS.01637   MBL 0105077676
HBL IPS.01815   HBL IPS.01815


ABL 0010061133180030    ABL 0010061133180030
FBL IPS.00101-000004829 FBL IPS-00101-000004829
MCB 10405   BIPL    BIPLIPS037
MCB 10465   MBL 0105079814
BLF 115131291003551111  BLF 115131291003551111
FBL IPS-00101-000004862 FBL IPS-00101-000004862
      For PID and Sukuk


MCB Bank Limited    IPS-CN0010598
NBP IDC-0321022
Bank-Al-Habib   T-Bill 0786-0790-175925-01-7
    PIBs 0786-0791-175925-01-8
BOP 20200119
BOP 20200123
Meezan Bank 105143461
BOP 20200124
MCB Bank Limited    0010590
MCB Bank Limited    CN0010591
HBL IPS-2242
HBL IPS-2243
MCB Bank Limited    CN0010604