ISLAMABAD: Karot Power Company (Pvt) Limited (KPCL) has sought an amount of Rs 22.703 billion from Central Power Purchasing Agency–Guarantee (CPPA-G) by April 10, 2023 to settle its liabilities including principal and interest.
KPCL’s Chief Executive Officer (CEO) Wang Minsheng in a letter to Rehan Akhtar, CEO CPPA-G stated that the company has to make mandatory payments of interest, commitment fee and principal loan amount and any delays in payments will result in a breach of covenants resulting in an event of default for the company.
As defined in clause 1 of the Common Term Agreement signed between the company, Export Import Bank of China (CEXIM), China Development Bank (CDB), Silk Road Fund (SRF) and International Finance Corporation (IFC) on November 25, 2016, the company has to pay a 2nd principal repayment of loan along with interest due on the date of due repayment i.e. April 21, 2023.
As per section 2.05 of the Facility Agreements signed between the company and lenders (CEXIM, CDB, SRF and IFC) the company has to pay 2nd repayment equivalent to 3.31 percent of the outstanding loan amount adjusted as per clause 4.12 including interest due, i.e. equivalent to Rs 22.703 billion.
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The amount has to complete the formalities of the SBP approval regarding the transfer of funds from revenue account to USAD debt payment account by April 15, 2023. The power company has requested CPPA-G to settle company’s due invoices by April 10, 2023.
Currently, invoices are being submitted based on reference tariff without indexation determined by Nepra on actual cost incurred by KPCL at the time of Commercial Operation Date (COD) stage tariff.
The CEO KPCL noted that at present the overdue receivables from CPPA-G amount to Rs 4.937 billion. Further, the company has also submitted differential invoices on account of applicable indexations for the period April 2023, therefore, the company has requested CPPA-G to release due payments along with the differential invoices on account of applicable indexations for the period April 2022 to December 2022 as approved by Nepra which is equivalent to Rs 12.5 billion.
As per the working, the company has to pay Rs 22.703 billion in lieu of 2nd principal repayment and interest in April 2023. The company has requested CPPA-G to release due payments along with the differential invoices by April 10, 2023 and help the project settle its loan liability so that default could be avoided, he added.
Copyright Business Recorder, 2023