RLNG power plants’ sell-off: JP Morgan team briefed on investment opportunities

ISLAMABAD: The Privatisation Division has held a meeting with JP Morgan officials in the backdrop of the privatisation of two RLNG power plants of Haveli Bahadar Shah and Balloki.

The JP Morgan is one the world’s largest investment banks and advising the consortium of Qatar Investment Authority (QIA), which showed keen interest for the privatisation of the NPPMCL.

The senior representatives of JP Morgan Asif Raza - managing director, Global Corporate Bank CEEMEA along with Imran Zaidi - managing director, Global Corporate Bank MENA and Amin M Khawaja, chief executive officer, Pakistan called on Federal Minister for Privatisation Mohammedmian Soomro while senior officials of the ministry also attended the meeting.

The government has initiated a process of implementing economic reforms in the power sector, as a part of the reform, the Ministry of Privatisation is pursuing privatisation of state-owned entities to promote and enhance capital formation outside the government budget and to improve efficiency through competition, accountability, managerial autonomy, and profit incentives.

The process of privatisation of two RLNG plants was slowed down due to the Covid-19 pandemic.

There was a considerable progress made as 12 parties were pre-qualified in April 2020. The process restarted after the Covid-19 restrictions were relaxed. Currently, the ministry is pursuing debt-refinancing and recapitalisation for the NPPMCL, with local banks.

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The MD (JP Morgan) expressed that their consortium, QIA, is a strong contender for investment for the said power plants.

The representatives inquired about the current volume of circular debt, payment due to the IPPs and the huge receivables of the NPPMCL, which could have strong bearing/negative impact on the potential investment in the sector.

Mohammed Mian Soomro said that the meetings regarding these issues are held with the Ministry of Energy and the Finance Division,

He also said that the local banks and the DFIs are considering providing the significant portion of debt for the NPPMCL.

It was also briefed that the Ministry of Privatisation has resolved various key issues to make this transaction viable, these include approval of the CCI for inclusion of power plants in the privatisation list with the Ecnec approval for project costing, transfer of the land for the NPPMCL from the Punjab Government, approval of the COD tariff determination, amendments to the Canal and Drainage Rules approved from the Punjab government, conversion of land use of both power plants approved by the local government, water usage agreements with the Punjab Government and also drafted scheme for de-merger of the NPPMCL into two separate companies prepared for submission to the SECP.

The federal minister said that owing to the positive response from the investors the transaction will hopefully be completed in this fiscal year. The representatives from JP Morgan said that for the wider interest of the country we wish to bring investment in power sector.

Copyright Business Recorder, 2021