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ISLAMABAD: The government has started making payment of Rs134.8 billion to the IPPs of pre-1994 policy, 1994 and 2015 policies as equity of power Distribution Companies (Discos) instead of outstanding subsidy.

On November 15, 2021, the Economic Coordination Committee (ECC) of the Cabinet headed by Omar Ayub Khan approved payment of Rs134.783 billion to clear remaining agreed amount of 20 Independent Power Producers (IPPs) by December 3, 2021.

On September 28, 2021, Federal Cabinet approved Rs52.4 billion as first instalment of 11 IPPs of Power Policy 2002. These revised contracts have already been approved by ECC, CCoE and Federal Cabinet during the second week of February 21 after a lot of deliberations and efforts.

The break-up of Rs134.78 billion, i.e.; 60% of total amount as second instalment is as follows: (i) Hubco (RFO)- Rs 34.789 billion; (ii) Kapco (gas/ RLNG&RFO, Rs59.4 billion; (iii) Rousch (gas/RLNG)- Rs 8.533 billion; (iv) Fauji (gas/ RLNG) Rs 2.637 billion; (v) Pak Gen Power (RFO)- Rs 9.8 billion; (vi) Lalpir Power (RFO)- Rs 9.289 billion; (vii) KEL (RFO)- Rs 2.984 billion; (viii) Saba Power (RFO) 1.078 billion;(ix) FFC Energy (wind)- Rs 2.072 billion;(x) ACT(wind)- Rs 0.978 billion; (xi) Artistic Energy (wind)-Rs 1.362 billion; (xii) Harapa (Solar) – Rs 0.095 billion; (xiii) AJ Power (solar) –Rs 0.040 billion; (xiv) RYK Mills(Bagasse)-Rs 0.314 billion; (xv) JDW Sugar Mills Unit-II( bagasse0 Rs 0.696 billion;(xvi) JDWQ Sugar Mills Unit-III

(bagasse)- Rs 0.598 billion ;(xvii) Hamza Sugar Mills (bagasse) –Rs 0.093 billion; (xviii) Thal Industries Corporation(bagasse)-Rs 0.067 billion ;(xix) Almoiz Industries Limited (bagasse) Rs 0.0138 billion; and( xx ) Chanar Energy Limited (Bagasse) Rs 0.0486 billion.

The sources said, of Rs 134.783 billion, Rs 44.297 billion (1/3rd) are paid in cash, PIBs and Sukuks each.

On November 10, 2021, Deputy Secretary (Finance Division), Shahnaz Akhtar supported the proposal of Power Division for payment of Rs134.783 billion. He said, Supplementary Grant (SG) or Technical Supplementary Grant (TSG) of Rs.134.783 billion may be provided to Power Division subject to the condition that this amount will be booked in the respective Discos against the outstanding subsidy claims of power sector pertaining to FY 2019-20 and FY 2020-21. Further, SG/TSG of the said amount should be released to respective IPPs after completion of all codal, legal formalities /pre-requisites and tax, NAB related issues, if any.

Finance Division maintained that SG/TSG will be provided to Power Division in the following way: (i) TSG of Rs.77.760 billion through surrendering of equivalent amount from Finance Division’s Demand No.45 for making payment in November, 2021; and (ii) SG of Rs.57.023 billion will be provided during the month of December, 2021, keeping in view the financial constraints.

An official told Business Recorder that now arrangements would be made to pay Rs52.4 billion as first instalment of 40 per cent of agreed amount to the IPPs of 2002 policy adding that some issues related to these plants are yet be resolved.

The ECC has also approved payment of undisputed amount of about Rs9 billion to M/s Nishat Chunian of renowned businessman Mian Muhammad Mansha.

“It was obligatory for the GoP to pay second instalment of 60 per cent to the IPPs of 1994 policy, pre-1994 and 2015 before December 3, 2021 to avoid default,” the official maintained.

Copyright Business Recorder, 2021

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