ISLAMABAD: M/s Karoot Power Company Limited (KPCL) has urged the Central Power Purchasing Agency-Guaranteed (CPPA-G) to ensure payment of due amount to settle its loan liability and avoid default in payment.
In a letter to Chief Executive Officer of CPPA-G Rehan Akhtar, KPCL’s CEO Wang Minshing referred to a letter dated September 27, 2022, where the company noted that it has to make mandatory payments of interest, commitment fee and principal loan amount and any delays in the payments will result in a breach of covenants, resulting in an event of default for the company.
As defined in clause 1 of the Common Terms Agreement signed between the company, Export Import Bank of China (CEXIM), China Development Bank (CDB), Silk Road Fund (SRF) and International Finance Corporation (IFC) of November 25, 2016, the power company was to pay the first principal repayment of loan along with interest due on the date of due repayment, i.e., 25th November 2022.
The company has arranged financing facility of $ 1,392,000,000 from the lenders out of which it has utilized $ 1,249,896, 399. Following are the total amounts to be paid by KPCL in lieu of interest and principal loan on November 25, 2022.
As per section 2.05 of the Facility Agreements signed between the company and lenders (CEXIM, CDB, SRF and IFC) the company has to pay the first repayment equivalent to 3.25 per cent of the outstanding loan amount.
According to him, of total outstanding loan of $ 1,249,895,399(equivalent Rs. 11,314,249,964) share of CEXIM is $ 553,874,570(Rs. 5,009,843,718)), CDB, $ 454, 177, 145(Rs. 4,108,071,830), SRF, $ 184,624,858 (Rs 1,669,947,918) and IFC $ 57,219, 827 (Rs 526,386, 497).
Following are the details of Rs 12,454,748,595 payments which are also due and will have to be paid in coming months: (i) Sinosure, Rs. 1,302,608,916; (ii) project insurance (Rs. 110,198,438); (iii) O&M, Rs 1,140,498,631; (iv) interest, Rs 2,360,933, 331 to be paid by November 25, 2022; and (v) principal loan amount Rs 8,953,316,633 also to be paid by November 25, 2022.
Currently, invoices are being submitted based on reference tariff without indexation determined by NEPRA in 2016 which is almost 50 per cent of the actual tariff to be determined by the regulator on actual cost incurred by KPCL at the time of Commercial Operation Date (COD) stage tariff. Invoice for the differential on account of applicable indexation shall be issued after approval of the indexed variable energy purchase price and capacity payment price by NEPRA.
Following is the detail of total receivable from CPPA-G: (i) total due receivables on account of capacity invoices, Rs 2,868,276,445; and (ii) not due, Rs 2,719,111,354.
Total receivables from CPPA-G are Rs 5,587,387,799.
As per workings, the company has to pay over Rs 13 billion in November 2022, and has urged the government to release due amounts and help the project settle its loan liability to avoid default in payments.
Copyright Business Recorder, 2022
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