The Board of Directors (BoD) of Lalpir Power Limited will place the proposed terms for early termination of company’s agreements with the government before the shareholders for approval.
The listed Independent Power Producer (IPP) shared the development in a notice to the Pakistan Stock Exchange (PSX) on Thursday.
“The BoD of Lalpir Power Limited in its emergent meeting held on October 09, 2024 discussed the terms proposed for the early termination of the company’s Implementation Agreement (IA) dated 24.09.1994 entered into with the President of the Islamic Republic of Pakistan, for and on behalf of the Islamic Republic of Pakistan, the Power Purchase Agreement (PPA) dated 03.11.1994 entered into with the Central Power Purchasing Agency (Guarantee) Limited (Power Purchaser) and the guarantee dated 16.05.1995 (guarantee”, together with the PPA and the IA to be collectively referred to as the agreements) issued by the President of the Islamic Republic of Pakistan, for and behalf of the Islamic Republic of Pakistan, in light of the discussions between the Government of Pakistan (GoP), its entities and certain IPPs, including the company,“ read the notice.
Listed IPPs Hubco, Lalpir call emergency meetings as govt moves towards agreement termination
Lalpir said that the agreements are scheduled to expire on November 28, 2028.
“The Board recommended that the proposed terms for early termination of the agreements be placed before the shareholders for their approval”, and has authorized the Chairman, CEO or company’s Secretary to issue notice for Extra-Ordinary General Meeting for seeking the shareholders’ approval for the early termination of the agreements.
“The termination of the agreements shall be subject to approval of shareholders of the company and formal signing of the relevant agreement with the Power Purchaser and the GoP,” it added.
The development comes as the government seeks to renegotiate or scrap contracts with IPPs in a bid to address financial challenges and streamline the power sector.
Business Recorder on Tuesday reported that the federal government’s work on different IPPs has started delivering results as four IPPs, M/s Atlas Power, M/s Saba Power, M/s Rousch Power and Lalpir Power have initialled (signed) premature scrapping of pacts whereas Hubco is likely to follow suit on Tuesday or Wednesday.
As per the report, the Task Force on Power Sector, which also comprises two senior security officers besides lawyers on the board and experts from SECP, PPIB, CPPA-G and Nepra played a key role in convincing IPPs, established under pre-1994, 1994 and 2002 Power Generation Policies to renegotiate.
It informed that three IPPs Hubco Power, Rousch Power and Lalpir Power, fought till the end but ultimately showed leniency on premature termination of Power Purchase Agreements (PPAs).