ISLAMABAD: The Private Power & Infrastructure Board (PPIB) has approved extensions in Financial Closing (FC) date of 1320-MW Thar coal power project of M/s Thar Coal-Block 1 Power Generation Company (Pvt.) Ltd (TCB-1) till December 31, 2022 and RCOD of ThalNova Power Thar Private Limited up to June 30, 2022.

These decisions were taken at a meeting of Board of PPIB, headed by Secretary Power Division, Rashid Mahmood Langrial.

According to informed sources, Managing Director PPIB stated that extension in FC of TCB-I has been recommended by Projects’ Committee in its 6th meeting.

TCB-I has fulfilled almost all prerequisites of FC and the only issue pending is that lenders are reluctant to release the Lenders Notice due to uncertainty of Sinosure Policy.

However, TCB-I has already acquired approval of $300 million and are in the process of acquiring additional $300 million loan from public market. TCB-I has also extended validity of PG up to March 31, 2023.

TCB-1 has started construction from its equity with FC being achieved and the project is near completion. Representative Planning Division added that Projects’ Committee has recommended extension in FC with two conditions; (i) TCB-I will not claim or request for any extension in Required Commercial Operation’s Date (RCOD) on basis of FC extension; and (ii) it will pay to CPPA-G by way of Liquidated Damages a pro-rata amount equivalent to the Transmission Service Charge (TSC) payable by NTDC to Pak Matiari-Lahore Transmission Company Limited.

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After deliberation and considering recommendations of Projects’ Committee the Board decided as follows: (i) the Board approved extension in Financial Closing Date of M/s Thar coal Block-l Power Generation Company Limited up to December 31, 2022 pursuant to Section 8.4 (ii) (c) of Power Generation Policy 2015 subject to: (a) the project will not claim or request for any extension in RCOD in future on basis of extension in Financial Closing Date;(b) TCBI shall pay to CPPA-G by way of Liquidated Damages (LDs) a pro-rata amount equivalent to the Transmission Service Charge (TSC) payable by NTDC to Pak Matiari-Lahore Transmission Company Limited as agreed in the Power Purchase Agreement (PPA); and (c) submission of prescribed FC date extension fee to PPIB.

ThalNova Power MD PPIB apprised that the Projects’ Committee has recommended extension in RCOD up to July 1, 2022 and 2nd amendment to Implementation Agreement (IA) of ThalNova Power Thar (Private) Limited (TNPTL). The committee also recommended informing the Board about RCOD extension of Thar Energy Limited (TEL).

MD PPIB further explained that due to outbreak of COVID-19 in February 2019, unavailability of local coal and slowdown in electricity demand the projects were not able to meet timelines and consequently force majeure notices were served by TEL and TNPTL to CPPA-G and vice versa.

CPPA-G Board in November 2021 approved RCOD extension of TNPTL and later also signed amendment to PPA of TNPTL. In the IA of TNPTL, the RCOD has mentioned March 31, 2021 as a fixed cut-off date. Now in order to make the definition of RCOD in the IA consistent with that of PPAs, an amendment was required in IA.

It was apprised that in case of TEL, the CPPA-G Board in December 2021, approved extension in RCOD on account of Other Force Majeure Event (OFME) due to COVID-19, subject to the condition that TEL will ensure the payment of HVDC charges from the date of COD of HVDC line.

CPPA-G later also signed amendments to the PPA of TEL. No amendment in IA is required in case of TEL as definition of RCOD in the IA does not imply a dead date rather an open date that is linked to the date of FC. Therefore, the case was submitted to the Board only for information.

Considering recommendations of Projects’ Committee, the Board took the following decisions: (i) extension in RCOD of ThalNova Power Thar Private Limited up to June 30, 2022;(ii) approval of 2nd amendment to Implementation Agreement of ThalNova Thar Power Private Limited; and (iii) the matter regarding extension in RCOD of TEL, submitted for information of the Board was acknowledged by the Board.

Copyright Business Recorder, 2022

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