Deals with IPPs: Nishat Chunian executes Amended Agreement; Pakgen Power terminates PPA

Nishat Chunian Power Limited (NCPL), an Independent Power Producer (IPP), has formally executed the Amendment Agreement reached with the government last year.

The IPP disclosed the development in its notice to the Pakistan Stock Exchange (PSX) on Tuesday.

“Further to our letter No. NCPL/PSX/10081-82 dated December 04, 2024, we would like to inform you that the company has formally executed the Amendment Agreement on the terms already disclosed to the PSX through above-referred letter,” read the notice.

Last year in December, the Board of Directors (BoD) of NCPL approved the amendments to the Power Purchase Agreement, Implementation Agreement and to revise tariff as proposed by Task E constituted by the Prime Minister of Pakistan to convert the existing tariff to ‘Hybrid Take and pay’ model.

Under the amended agreement, “the insurance premium tariff is capped at 0.9% of EPC Cost; the company will share profits till FY’23 and it will be adjusted against receivables from CPPA; GoP will unconditionally withdraw arbitration under Arbitration Submission Agreements (ASA).”

As per the terms and conditions, “the undertaking provided to the power purchaser by the company to retain its receivables till the conclusion of arbitration under ASA shall be returned; payment of outstanding receivables as on October 31, 2024 within 90 days of approval of the agreement by the Cabinet; waiver of delay payments till October 31, 2024; and LCIA Arbitration clause in PPA will be substituted with Islamabad seated Arbitration under the local laws.”

NCPL runs a fuel-fired power station having a gross capacity of 200 MW and a net capacity of 195.722 MW. It entered into a Power Purchase Agreement (PPA) with its sole customer, CPPA-G, for twenty-five years which commenced on July 21, 2010.

Moreover, another IPP, Pakgen Power Ltd (PKGP), has officially terminated its Power Purchase Agreement (PPA) and other agreements with the federal government.

The development comes following shareholder approval on January 27, 2025, the company said in a separate notice to the bourse on Tuesday.

“The company have formally executed the Negotiated Settlement Agreement to terminate the Power Purchase Agreement, Implementation Agreement and Guarantee,” read the notice.

PKGP owns, operates and maintains a fuel-fired power station having a gross capacity of 365 MW in Mehmood Kot, Muzaffargarh, Punjab, Pakistan.