ISLAMABAD: Kot Addu Power Company (Kapco) has expedited its efforts for renewal of its Power Purchase Agreement (PPA), saying that the plant can be available for another 10 years.
In a letter to Secretary Power Division, Rashid Langrial, Chief Executive, Kapco, Aftab Mahmood Butt, has cited an earlier letter of June 13, 2022, titled Power Purchase Agreement of Kapco which is set to expire on October 24, 2022, a mere few weeks from the present.
The CE of the company argued that in accordance with the provisions of the PPA, Kapco formally notified the power purchaser to enter into good-faith negotiations for the renewal of the PPA in June-2019 and has since then been continuously pursuing a consent letter. Unfortunately, the matter has not been concluded due to various reasons including the pandemic (Covid-19) as well as reasons attributable to the power sector of Pakistan.
He further claimed that Kapco has been continuously supporting the system by providing the necessary required power despite its overdue receivables from the power purchaser being in the tens of billions of rupees.
“We have conducted a comprehensive study on a plan for its remaining and technical life which suggests that it can be operated for at least another 10 years,” he maintained.
Keeping in view the condition of the plant, flexibility of fuel, system constraint, the company is confident that it can still play/contribute to national interest at very attractive and beneficial terms.
In addition, Kapco’s switchyard is being used by the power purchaser/NTDC for 220kV-132kV step-up/step-down facility, irrespective of generation from Kapco power plant. The timely conclusion of the commercial arrangements will ensure its availability to serve (including switchyard). Any failure or delay can create a significant disruption in the system especially for southern Punjab.
Copyright Business Recorder, 2022