Govt striving to gradually manage circular debt Rs807,887mn of IPPs; Senate told

ISLAMABAD: Minister for Power Omar Ayub Khan Wednesday said the government was striving to gradually manage the outstanding amount of circular debt in respect of Independent Power Producers (IPPs), which is presently at an amount of Rs807,887 million.

Replying to a question in the Senate, he said the payment of circular debt depends on collection from electricity distribution companies based on their recoveries from consumers which is a continuous process.

He said the government is introducing efficiency improvement to recover outstanding liabilities. An anti-theft campaign has also been launched across the country to control losses and improve recovery position, he added.

The minister in a written reply said the circular debt payable to power producers as on December 31, 2018 was Rs 683,484 million while amount payable to fuel suppliers by GENCOs was Rs124,403 million.

He said the estimated cost of the Nandipur Power Project as per Original PC-I (2007) was Rs 22,334.75 million, whereas, the estimated cost as per approved revised PC-I (2013) is Rs 58,416.20 million.

He said the actual cost incurred so far is Rs57, 655.00 million and currently, the power plant is capable to generate around 460-480 MW of electricity on gas fuel.

He said the load varies with ambient conditions as NEPRA has determined levelized tariff of Nandipur Power Plant on gas fuel as Rs10.3157/KWh.

The minister said several steps have been taken by the government through Alternative Energy Development Board (AEDB) and Private Power Infrastructure Board (PPIB) in respect of foreign investment in power generation sector.

He said AEDB is pursuing the development of renewable energy based power generation projects through private sector on IPP mode under the Renewable Energy (RE) Policy 2006.

He said the government is providing several fiscal and financial incentives under the Renewable Energy policy to private investors which have attracted a lot of foreign investors in the Renewable Energy sector.

He said several other steps have also been taken by the government to attract foreign investors, which included preparation and approval of bankable standard security agreements (Energy Purchase Agreement and Implementation Agreement) for wind, solar and bagasse cogeneration power projects.

He said other steps included conducting resource assessment of renewable energy resources in Pakistan. He said detailed ground data based resource assessment of wind, solar and biomass is being carried out through the support of Energy Sector Management Assistance Program (ESMAP).

He said the government has decided to develop more wind and solar power projects through competitive bidding in order to avail benefits of decreasing prices through market competition.