ISLAMABAD: UEP Wind Power (Private) Limited, a 99-megawatt wind power project and an early-harvest priority project under the China-Pakistan Economic Corridor (CPEC), has sought Rs5.824 billion from the Central Power Purchasing Agency-Guarantee (CPPA-G) to meet mandatory financial obligations by December 31, 2026, warning that a liquidity shortfall could expose the company to a default scenario.
In a letter dated October 19, 2026, addressed to the Chief Executive Officer of CPPA-G, UEP Wind Power stated that its projected cash-flow position was insufficient to meet debt servicing, operations and maintenance (O&M) charges, sales tax, repayment of a working-capital loan, insurance and other operating expenses through the end of December.
The company has requested the release of Rs5.824 billion in tranches according to a month-wise payment schedule to enable it to discharge its financial obligations within the stipulated timelines.
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According to the letter, the largest component is repayment of a working-capital loan amounting to Rs2.651 billion, followed by debt servicing of Rs1.834 billion payable to China Development Bank (CDB). The company has also projected an O&M operator’s fee of Rs841.38 million, sales tax liabilities of Rs323.59 million, other operating and administrative expenses of Rs125.94 million, and project insurance costs of Rs48.47 million.
UEP Wind Power stated that these payments were necessary to ensure the smooth and uninterrupted operation of the project. It has requested CPPA-G’s continued support to avoid a potential default and settle the liabilities within the prescribed deadlines.
The letter also highlights the company’s growing receivables. Unpaid invoices are projected to rise from Rs8.117 billion in October to Rs9.317 billion by December 2026, while overdue invoices are expected to increase from Rs6.532 billion to Rs8.147 billion during the same period.
The company said continued support from CPPA-G had enabled it to settle long-overdue liabilities to its O&M operator. It has now sought priority for repayment of a long-overdue shareholder loan, which its shareholder has advised should be repaid in full by December 31, 2026.
UEP Wind Power has separately drawn attention to its sales tax liability of Rs323.592 million, which it described as a mandatory obligation towards the national exchequer by December 22, 2026.
The company further stated that it had entered its tenth year of operation but had not yet been able to distribute any dividend to its shareholders.
Under the proposed schedule, the company requires approximately Rs628.14 million in October, Rs179.61 million in November and Rs5.016 billion in December to meet its projected financial obligations. The December requirement includes the bulk of the debt-servicing and working-capital loan repayments.
According to sources, CPPA-G owes approximately Rs500 billion to Chinese power plants established under CPEC, amid financial constraints attributed to inadequate recoveries by power distribution companies (DISCOs). Sources said DISCO recoveries remained below the level required under the National Electric Power Regulatory Authority’s (NEPRA) directives, which require distribution companies to recover 100 per cent of billed amounts from consumers.
The mounting receivables have added to liquidity pressures on CPEC power projects, complicating their ability to meet debt-servicing obligations and other financial commitments. UEP Wind Power’s request highlights the potential consequences of delayed payments for individual projects, including the risk of default if mandatory obligations cannot be met on time.
Copies of the letter have also been sent to the Embassy of China in Islamabad, the Secretary of the Power Division, the Managing Director of the Private Power and Infrastructure Board (PPIB), the Chief Financial Officer of CPPA-G and the CPEC Authority.
Copyright Business Recorder, 2026
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