ISLAMABAD: Water and Power Development Authority (WAPDA) has sought help from the Power Division for a monthly payment of Rs 7.5 billion against hydroelectric invoices and an outstanding amount of over Rs233.5 billion from the Central Power Purchasing Agency Guaranteed (CPPA-G).
In this regard, acting Chairman WAPDA, Naveed Asghar Chaudhry, a very close associate of former Chairman WPADA, Lt. General Muzammil Hussain (retired) who is facing a National Accountability Bureau (NAB) probe with respect to alleged wrongdoings in Tarbela IV extension project, has written a letter to Secretary Power Division.
The International Rating Agency, Moody’s, in its investor's service, has recently downgraded the outlook of WAPDA from stable to negative.
The acting Chairman WAPDA has also cited reference of earlier correspondence of April 23, 2022 on the issue wherein it was requested that CPPA-G be directed to release WAPDA’s bare-minimum monthly requirement of Rs. 7.50 billion against its hydroelectric invoice(s). However, CPPA-G over the past two months has drastically reduced its releases to WAPDA and in May, 2022 it only paid Rs. 2.5 billion against a committed energy component of Rs. 5.00 billion.
“This fact has not only dampened our financial capacity but is also resulting in a consistent build-up of hydro-electric receivables which have now reached a staggering figure of Rs. 233.251 billion,” he added.
The details of outstanding receivables of WAPDA are as follows: (i) energy receivables –Rs 78.921 billion;(ii) NHP payable to provinces – Rs 64.834 billion with GoKP Rs 5.107 billion, and GoPB, Rs 59.727 billion); and (iii) loans payable to federal government Rs 89.496 billion.
According to the letter, in compliance with the ECC decision of March 6, 2022, CPPA-G was to release Rs. 25 billion in three equal monthly installments to WAPDA.
However, CPPA-G has released two installments of Rs. 8.3 billion each on account of long-standing energy receivables up till May 30, 2020 which were utilized for essential payments like pension/ debt payment fund, etc., which were meant to pay off long-standing outstanding dues and should not be linked with routine monthly energy parts being made to WAPDA.
“Delays in CPPA-G payments has a debilitating impact on the progress of our development projects of strategic national importance besides undermining WAPDA’s capacity to meet essential payments including O&M expenses and debt servicing of its commercial loans which have been directly procured by WAPDA through international and local financial and capital markets,” said Chaudhry, in his letter, copies of which have also been sent to Secretary Ministry of Water Resources and Chief Executive Officer CPPA-G.
“The State Bank of Pakistan has raised its key policy rate to 13.75% besides PKR is also trading at historic low…. This has substantially increased our debt servicing cost of both local and foreign loans.
As such, our bare minimum monthly requirement of Rs.7.50 billion is quintessential to meet repayment(s) in respect of Credit Suisse Loan of US$ 350 million and Green Euro Bond of US$ 500 million,” the letter adds.
After explaining the case, acting Chairman WAPADA has once again requested that necessary directions may be conveyed to CPPA-G for making a monthly payment of Rs.7.50 billion to WAPDA against its monthly hydroelectric invoice(s) besides immediately clearing overdue hydroelectric receivables of Rs 233.521 billion at the earliest enabling the entity to meet its operational and development needs.
Copyright Business Recorder, 2022