ISLAMABAD: The Independent Power Producers (IPPs) that are to be quizzed in the second phase to shift them from take or pay to take and pay mode reportedly are now agitating on stoppage of their payment by the CPPA-G since the last two weeks, well-informed sources told Business Recorder.

The government is expected to send calling notices to 18 IPPs of 1994 and 2002 Policies for negotiating on the terms of Power Purchase Agreements (PPAs).

One IPP in the ‘hit list’ has written a letter to Central CCPA-G referring to its letter of Sept 19, 2024 in which it requested release of Rs 2.390 billion to enable debt servicing needed to ensure timely servicing of the next debt servicing installment to the Company’s foreign lender, Asian Development Bank (ADB), International Financial Corporation (IFC), Islamic Development Bank (IsDB), and Societe De Promotion ET DE participation Pour LA Cooperation Economique S.A (Proparco) is due on Nov 5, 2024.

Pay-mode conversion: Govt summoning 18 IPPs next week

The letter states that “we have noted with concern that from October 3, 2024, no payment has been released by CPPA-G, and that total payment received subsequent to our request is Rs 875 million, which implies that there is a shortfall of Rs 1.515 billion. Apparently, media reports suggest that payments have been stopped in preparation of some renegotiations.”

According to the company, given the current shortfall, Laraib Energy Limited will not be able to timely service its last installment to multilaterals lenders.

“We urgently request the immediate release of our payments to avoid a default on the Company’s foreign loans, as failure to meet this obligation will have severe consequences.

A default not only jeopardizes Laraib Energy Limited but also risks damaging the country’s financial credibility globally. Immediate action is crucial to safeguard both the Company and the nation’s reputation,“ the Power Company’s Chief Financial Officer wrote in his letter to CEO CPPA-G.

Copyright Business Recorder, 2024