ISLAMABAD: Finance Minister Ishaq Dar is likely to visit Qatar next week wherein he would offer RLNG projects, more fiscal support and investment in green energy projects near RLNG projects, well-informed sources told Business Recorder.
The finance minister, sources said, has desired to have a follow-up meeting on the action emanating from the last visit of the Prime Minister to Qatar ,i.e., details of solar power policy being formulated by GoP, project proposal details to include tariff review mechanism as per international standards, modalities for land acquisition and list of Chinese companies with technical expertise in solar power.
The concerned organisations have been asked to identify location of lands for installation of such solar parks required to be communicated to Qatari side.
Legal frameworks (G2G basis) relating to these projects may be shared. List of operators identified for such solar projects may be communicated. Also copy of the draft implementation requirement, power purchase agreement may be shared with the Qatar Investment Authority (QIA) and an invite to the delegation of QIA for a visit of the identified sites for such projects will be extended and for negotiation of EPC, supply, installation of operation and maintenance agreement.
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Power Division stated the ECC, in its decision on April 14, 2021, had approved the proposal to waive off the minimum 56% take-or-pay commitment in Power Purchase Agreement(s) (PPA) & Gas Supply Agreement(s) (GSA) of three public sector RLNG power plants namely, Quaid-e-Azam Thermal Power Plant, Balloki Power Plant and Haveli Bahadur Shah Power Plant.
Further instead of annual production plan for firm gas commitment, the concept of monthly production plan binding on the power purchaser and the project companies was introduced with effect from year 2022. Although, the decision of the ECC was put in practice, but the related amendments in PPA and GSA could not be given effect which also affected and delayed the privatisation process of National Power Parks Management Company which owned and operated two out of three RLNG power plants namely Baloki and Havili Bahadur Shah.
It was further added that prevailing international economic conditions and the unprecedented international market had made it expedient that the ECC decision be revisited to optimise the utilisation of RLNG for the continue projects.
On January 11, 2023, the ECC approved amendments in IA and GSA of RLNG power projects to facilitate sale of these plants to Qatar.
Power Division further noted to the ECC that a meeting was also held on December 30,2022, including all key stakeholders including Privatisation Commission, Petroleum Division, Power Division, PPIB, NPPMCL SNGPL and CPPA-G, to deliberate on the issues on amendments in Implementation Agreement (IA), PPA and GSA.
The participants noted that main issue was to settle changes required in GSA which were then to be reflected in PPA and IA for which changed language had already been finalised.
For changes required in GSA, primarily two issues were highlighted; i.e. amendment in 66% take or pay commitment should be fixed at 33 percent and that the Gas Supply Deposit (GSD) under the GSA be fixed equivalent to Rs 15 billion per power project instead of the existing GSD, which is equivalent to one-fourth of maximum gas allocation valued at current applicable gas price inclusive of taxes. It was further agreed that changes made in GSA shall be reflected in PPA and IA by relevant parties.
Power Division submitted the following proposals for considerate and approval of the ECC: (i) instead of completely diminishing the 66% “take-or-pay commitment” under the PPA and the GSA, it should be fixed at 33% to guard the interests of both buyers and supplier; (ii) the GSD under the GSA be fixed at Rs 15 billion per power project instead of the existing GSD, which is equivalent to one-fourth of maximum gas allocation valued at current applicable gas price inclusive of taxes; and (iii) PPIB, CPPA-G, SNGPL and NPPMCL be authorised to make respective project documents after completing other formalities.
During the ensuing discussion, the ECC was apprised that the Petroleum Division, in principle, supported the proposals however with the observation that GSD/ SBLC may be subject to biannual review between the parties on mutual consideration and the respective GSAs would be amended accordingly.
The ECC approved the proposal with the proviso that GSD/SBLC amount shall be subject to biannual review between the parties on mutual consideration and the respective GSAs would be amended accordingly.
Copyright Business Recorder, 2023
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