The government has convened a meeting of Independent Power Producers (IPPs) on Wednesday (today), official sources told Business Recorder. Recently, 25 IPPs have claimed that an audited overdue amount of almost Rs 270 billion which is payable to them by the government; seven IPPs formally notified the Government of Pakistan (GoP) on November 26, 2014 that they are invoking sovereign guarantees due to continuing default in payments by NTDC/WAPDA on account of power purchased from the IPPs amounting to Rs 26 billion.
Moreover, another three IPPs have served similar notices on government for calling the GoP sovereign guarantee on 1st and 2nd December 2014 in respect of an amount of Rs 14 billion. This amount if not cleared by 16 December 2014 will result in a total sovereign default of Rs 40 billion.
The sources said, the government will discuss the ways and means of payment with IPPs and half of the outstanding amount is likely to be paid to the protesting IPPs from government''s privatisation proceeds. One of the representatives of IPPs told Business Recorder that as per all previous and current power policies of GoP, the Ministry of Finance on behalf of President of Pakistan representing Islamic Republic of Pakistan provides a guarantee to potential investors whereby if power purchaser defaults, GoP would step into the shoes of the power purchaser and would pay on their behalf.
"Without this guarantee, no new investor would put up any power plant as nobody would take the risk on the power purchaser. So, this guarantee was given in good faith as a comfort of last resort to investors and is to be used as such," he added. When contacted Additional Secretary Incharge Ministry of Water and Power, Younas Dagha confirmed that a meeting of IPPs has been convened on Wednesday to resolve the payment issue amicably.
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