Listed IPPs Hubco, Lalpir call emergency meetings as govt moves towards agreement termination

Independent Power Producers (IPPs) listed at the Pakistan Stock Exchange (PSX), including Hub Power Company Limited (HUBCO) and Lalpir Power Limited, have called on emergency meetings as the government initiates steps to prematurely terminate their agreements.

The listed companies shared the development in their respective notices to the PSX on Thursday.

“This is to inform you that an emergent meeting of the Board of Directors of the company will be held on Thursday, October 10, 2024… to place before the Board, the terms proposed for the premature termination in October 2024, of the company’s Implementation Agreement, Power Purchase Agreement, Fuel Supply Agreement and the guarantee which were scheduled to expire in March 2027, in light of the discussions with the Task Force constituted under the Prime Minister’s Office and certain IPPs, including the company,” Hubco said in its statement.

A day earlier, a similar statement was shared by Lalpir Power Limited at the PSX.

“This is to inform you that an emergent meeting of the Board of Directors of Lalpir Power has been called… to place before the Board the terms proposed for the early termination of the Company’s Implementation Agreement, Power Purchase Agreement and the guarantee in light of the discussions between the Government of Pakistan, its entities and certain IPPs, including the company,” LPL said on Tuesday.

The development highlights the growing uncertainty among the energy sector players, as the government seeks to renegotiate or scrap contracts with IPPs in a bid to address financial challenges and streamline the power sector.

Business Recorder on Tuesday reported that the federal government’s work on different IPPs has started delivering results as four IPPs, M/s Atlas Power, M/s Saba Power, M/s Rousch Power and Lalpir Power have initialled (signed) premature scrapping of pacts whereas Hubco is likely to follow suit on Tuesday or Wednesday.

As per the report, the Task Force on Power Sector, which also comprises two senior security officers besides lawyers on the board and experts from SECP, PPIB, CPPA-G and Nepra played a key role in convincing IPPs, established under pre-1994, 1994 and 2002 Power Generation Policies to renegotiate.

It informed that three IPPs Hubco Power, Rousch Power and Lalpir Power, fought till the end but ultimately showed leniency on premature termination of Power Purchase Agreements (PPAs).

However, there are differences between Hubco and Government team on the amount of Rs1 billion, it said.