ISLAMABAD: UEP Wind Power Limited has approached CPPA-G for Rs 6.213 billion to clear its mandatory financial obligations till December 31, 2024, well-informed sources told Business Recorder.
In a letter to Chief Executive Officer, CPPA-G, the President UEP Wind Power Limited, Khurram Shahzad shared the financial obligation of the power company and delay in due payments by the market operator.
According to UEP, mandatory operational payment requirements to discharge outstanding financial obligations towards third parties include the upcoming debt service liability towards the project lender, China Development Bank, in December 2024.
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The company argues that considering the current cash flow scenario, it foresees a shortfall of Rs 6.213 billion on account of the mandatory financial obligations till December 31, 2024 to avoid default scenario.
Despite the impact of excessive curtailments and its impact on plant production, it can be noted that the unpaid invoices in December will cumulate to Rs 9.134 billion with an overdue amount of Rs.8.437 billion whereas the company is requesting CPPA-G to pay it an amount of Rs6.213 billion by December 2024.
The power company maintains that UEP was notable to make full payment to its O&M Operator as the payments from CPPA-G were primarily focused on debt servicing of June 2024. The outstanding payment of Rs 1.001 billion towards O&M operator needs to be settled by October 31, 2024.
The company further facilitated that the O&M payment for the last quarter of2024 is rolled over to Q1-2025. O&M payment in Oct-24 is critical as the O&M Operator has threatened to seize plant operations due to long outstanding payments.
The company noted that it has taken out cash requirement for repayment of principal amount of the loan$ 7 million taken from its Group as a Working Capital loan since 2019, rolling it over to next year, adding that UEP Wind Power entered its 8th operationalyea in June 2024 and till date it has not been able to release any dividend towards shareholders.
Considering the financial difficulties faced by UEP, CPPA-G should treat this letter as of critical importance and release the requested amount Rs 6.213 billion in tranches on or before dates shared with the CPPA-G.
Copyright Business Recorder, 2024