ISLAMABAD: The National Power Parks Management Company (Private) Limited (NPPMCL) has requested the State Bank of Pakistan (SBP) to remit $4.7 million to General Electric (GE) for the payment of Long-Term Service Agreements (LTSAs) related to two RLNG-fired power plants, sources told Business Recorder.
In a letter to the Governor of SBP, NPPMCL’s Chief Executive Officer, Akram Kamal, explained that NPPMCL, an Independent Power Producer (IPP), owns and operates two RLNG-based combined cycle power plants: the 1223 MW (gross) plant in Balloki, District Kasur, Punjab, and the 1230 MW plant in Haveli Bahadur Shah, District Jhang, Punjab.
Under the Implementation Agreements signed with the Government of Pakistan (GoP), it is stipulated that the GoP, through the SBP, will ensure the availability of foreign currency for essential foreign exchange expenses related to the operation of these power plants.
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The CEO further clarified that the Long-Term Service Agreements for both power plants were awarded to General Electric International Inc. (GE) from the United States following an international competitive bidding process. These agreements are essential for the continued maintenance and efficient operation of the plants. To pay for the services under the LTSAs, NPPMCL needs to obtain approval from SBP via its authorized dealer, United Bank Limited (UBL).
NPPMCL submitted the necessary applications to the SBP through UBL on October 9, 2024, for approval of the foreign remittances under the LTSAs. In response, the Foreign Exchange Operations Department raised several queries, which were promptly addressed. Despite this, final approval for the payments has not been granted.
The Finance Division issued a No Objection Certificate/waiver for the foreign exchange allocation for remittances to GE against the LTSAs on October 17, 2024. This NOC/waiver was subsequently submitted to SBP.
However, the delay in granting approval has prevented UBL from processing the payments is due to foreign exchange restrictions imposed by SBP. This delay is now impacting the operational reliability of the power plants, as GE has expressed significant concern over its ability to sustain operations at the Haveli Bahadur Shah and Balloki power plants.
The CEO of NPPMCL warned that any disruption in the availability of these critical power plants could adversely affect the country’s electricity supply. Therefore, NPPMCL has urged the Governor of the SBP to direct the Foreign Exchange Operations Department to approve the foreign remittances to GE without further delay. They emphasized that resolving this matter promptly is crucial to ensuring the uninterrupted operation of the power plants.
Copyright Business Recorder, 2024