ISLAMABAD: Private Power & Infrastructure Board (PPIB) has notified the government that Chinese insurer M/s Sinosure is reluctant to insure any new power project especially Gwadar power project due to rising overdue payments on commissioned CPEC power projects, sources close to MD PPIB told Business Recorder.
PPIB, sources said, has apprised the government that CIHC Pak Power Company Limited (CPPCL), the developer of 300-MW coal power project has requested PPIB for extension in Financial Closing (FC) Date, which shall be submitted for consideration of PPIB Board in its forthcoming meeting. Subsequent to approval of PPIB Board and fulfilment of necessary formalities by CPPCL, an amendment to Letter of Support (LoS) incorporating extension in the FC date shall be issued.
Managing Director PPIB Shah JahanMirza has also shared updated brief of the project for information and further necessary action.
According MD PPIB, project is under Financial Closing and construction activities were started at the site but later suspended as Company is not getting Sinosure insurance approval, adding that Sinosure is reluctant to insure any new power projects in Pakistan, especially Gwadar power project, owing to the trend of increasing overdue payments to commissioned CPEC power projects.
Financial closure of 3 power projects: Govt seeks Sinosure’s support
During a meeting held on January3, 2023 under chairmanship of Ministry of Planning, Development and Special Initiatives it was decided that work on the project must start immediately at already earmarked land at Karwat (Gwadar), with Commercial Operations by December2025. In another meeting held between Special Assistant to Prime Minister on Coordination with Chinese Ambassador on January 4, 2023, it was inter-alia discussed that CPPCL should complete all necessary work including achievement of FC by December 31, 2023, to ensure that power plant may start generating electricity by December 2025 and to commence construction prior to FC.
Earlier, PPIB Board extended FC Date of CPPCL up to December 31, 2022 (135th meeting) on June 21, 2022 and later for three months, i.e., March 31, 2023(137th meeting) on December 13, 2022.
Managing Director PPIB maintained that despite repeated reminders CPPCL did not fulfil formalities (extension in performance guarantee, FC date extension fee) for obtaining a formal extension in FC date through an amended Letter of Support. CPPCL instead has requested for only one-time extension up to December 31, 2023 in FC date pursuant to decisions of the meetings held on 3rd and 4th January 2023. The request of CPPCL for financial close date extension will be submitted for consideration of PPIB Board, Mirza added.
Copyright Business Recorder, 2023