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ISLAMABAD: Chinese company, Azad Pattan Power, Pvt Limited (APPL) which is establishing 700.7 MW hydel power project, has urged Private Power & Infrastructure PPIB (PPIB) to grant extension in financial close till December 31, 2024, as the project is strategic.

In a letter to Managing Director, PPIB, Shah Jahan Mirza, APPL’s Chief Executive Officer, Wang Xiaoming referred to two previous letters, written on May 30, 2023 and June 9, 2023 regarding exemption/waiver of fee for extension in Financial Close (FC) date under the Letter of Support (LoS), in accordance with the criteria per amended Rule 3A of the PPIB (Fee and Charges) Rules 2018, as approved by the PPIB Board.

The Company has further drawn attention of PPIB to the following facts: (i) under the China Pakistan Economic Framework (CPEC) Framework Agreement, all CPEC energy projects (including hydropower), as part of the “strategic cooperation” between China and Pakistan, have been classified as “strategic projects” by the

Govt bans issuance of LOIs for hydropower projects

respective Governments; (ii) Pakistan’s National Water Policy, under the “Strategic Priorities and Planning Principles”, has classified water, energy (hydropower) and food security as “strategic projects” as they are of ‘critical importance’ to the water and energy security of Pakistan; (iii) hydropower projects are classified as “strategic projects” under Pakistan’s strategic plans to replace imported fuel-based power generation, amongst others, with indigenous hydropower; (iv) under the Indus Water Treaty 1960, first use of water resources through construction of hydropower projects and/or agriculture use are essential to preserve Pakistan’s strategic water rights and are thus classified as

“strategic projects”; and (v) the reserved forest land acquired for the project pursuant to Section 27(3) of the Punjab Forest (Amendment) Act, 2016, can only be used or acquired by an organization for purposes of a “national project of strategic importance”.

Chinese company argued that the project fully qualifies as a strategic project, meets all the criteria provided under the Rules and accordingly is entitled for a fee waiver for extension in FC date under the LoS.

After giving references of different documents, the power company requested PPIB to issue the long-awaited extension letter to extend the FC date under the LoS up to December 31 2024, as approved by the PPIB Board in their meeting on December 13, 2022.

The 700.7MW Azad Pattan Hydropower Project, located on River Jhelum at dual boundary between AJ&K and Punjab is being developed under provisions of Government of Pakistan (GoP) Policy for Power Generation Projects 2002 by APPL comprising of China Gezhouba Group as the sponsors.

The project is included in the NEPRA-approved Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30 and is part of the China Pakistan Economic Corridor program.

Chinese insurance company M/s Sinosure provided insurance cover to the project, after high level interactions at the government level, as initially it refused to extend insurance cover due to Pakistan’s gigantic power circular debt and non-payments issue of Chinese projects.

Copyright Business Recorder, 2023

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