Fully complied with actions agreed with IMF: PD

ISLAMABAD: Power Division has claimed that it has fully complied with all the actions agreed with the International Monetary Fund (IMF).

“This is an assessment of existing portfolio. We have shared reports of actions taken till January 2024. IMF Mission will raise questions on the basis of analysis of our reports, which is part of the discussion. We will respond to those queries,” said an official.

In reply to a question, the official said that in future the IMF will take input from ministries and then there will be an agreement on the budget 2024-25.

Payment to Chinese IPPs: Power Division allowed to draw Rs4bn from PERA

The government has indicated that it would strive to reduce capacity payments as government pays arrears, either by renegotiating PPAs with a new strategy or by lengthening the duration of bank loans, depending on adequate budget space and Circular Debt Management Plan implementation progress.

“We will reassure the Mission that during FY24 the commitment of zero net CD accumulation for the current fiscal year will be honoured,” the official added.

Another official stated that as per commitment with IMF, negotiations with wind power projects are under way and an update will be shared with the Fund.

The same principle applies to the assumption of Power Holding Limited amortization by the federal budget. The government will also continue to refrain from netting out cross-arrears (unless they are independently audited), using “non-cash” settlements (e.g., payables against the reimbursement of on-lent loans to Discos) and issuing government guarantees (e.g., for PHPL-issued Sukuks to transfer CPPA-G payables to PHPL).

Power Division will share government’s enhanced and sustained anti-theft efforts, which have yielded about Rs100 billion from September 7 to March 10, 2024.

Other reforms and their progress will be shared particularly accelerating the green energy transition as per the 2021 National Electricity Policy, which mandates an increased share of variable and cheaper renewable energy in the generation mix. Progress toward this was recently made with an update of the IGCEP in 2022.

An IMF review mission is scheduled to visit Pakistan from March 14 to March 18. Finance Ministry has requested all the Ministries/ Divisions/ Organisations/ Entities to take stock of the quantitative performance criteria, indicative targets, structural benchmarks and other actions communicated by the Finance Division’s D.O letter of December 5, 2023 and subsequent correspondence on 2nd Review of IMF Standby Arrangement Program.

All concerned Secretaries or Heads of Organisations/ Entities have been requested to attend the review meetings in-person. In case the Secretary or head of the Organisation/ Entity due to direction of any higher authority is unable to attend the IMF negotiation meetings, then an officer not below Additional Secretary (BS-21) may be designated in writing to represent the Ministry/ Division/ Organisation/ Entity. The designated officer should be well-conversant with the position of the Ministry/ Division/ Organisation/ Entity on the issues to be discussed and should have full mandate to take decision on behalf of the Ministry/ Division/ Organisation/ Entity.

Finance Division further requested Secretaries/ Head of Organisation/ Entity and the deputed focal person to remain available in Islamabad till finalisation of the Staff Level Agreement (SLA). If outstation visit is required on any account, approval of the Minister for Finance and Revenue shall be solicited in advance.

Copyright Business Recorder, 2024