ISLAMABAD: Engro Powergen Thar Limited (EPTL) has asked Central Power Purchasing Agency-Guaranteed (CPPA-G) to pay at least Rs 32 billion by end of current month to avert default on upcoming debt obligation, well informed sources told Business Recorder.
The company forwarded its request to CPPA-G at a time when Minister for Planning, Development and Special Initiatives Ahsan Iqbal is in Beijing to clear misunderstanding between Islamabad and Beijing on delay in payment to IPPs established under China Pakistan Economic Corridor (CPEC).
Chief Financial Officer (CFO) of power generation company, Wang Bu, in a letter cited his earlier letter in which the company requested CPPA-G for payment of its outstanding liabilities.
Rs28bn receivables: Thar Power demands CPPA-G make payment
According to the company, EPTL is a pioneering CPEC project operating on indigenous Thar Coal and key Chinese stakeholders (Lenders and Sponsors) closely monitor collections to gauge viability of CPEC investments.
“Our current receivables from CPPA-G have reached an alarming level of Rs 79 billion, excluding April Energy Purchase Price (EPP) of Rs 5 billion out of which Rs 58 billion are currently overdue; as a result of this high overdue amount, we are facing a severe liquidity crunch with huge overdue liabilities to settle, as our payments to the lenders and suppliers are becoming due,” said the CFO.
EPTL has claimed that it had requested Rs 42 billion from CPPA-G to make necessary arrangements for debt servicing and to pay outstanding dues of fuel supplier (SECMC) and enable them to successfully complete their debt servicing which is also due by end of May 2024. However, the company only received Rs 10 billion out of the requested Rs 42 billion as of May 7, 2024.
EPTL plant is fully available and operating at high load factors thus requiring funds for operational expenses (fuel, water, limestone, O&M, insurance etc.) in addition to the funds required for debt servicing.
Based on the foregoing, the power company has requested CPPA-G to clear its overdue receivables and ensure payment of at-least Rs 32 billion to EPTL from now till end of May 2024 to ensure successful debt servicing and operation of EPTL power plant.
Copyright Business Recorder, 2024