Narowal Energy Limited (NEL), a wholly owned subsidiary of the Hub Power Company Limited (HUBCO), has formally executed the Amendment Agreement reached with the government last month.
The development was disclosed by HUBCO, Pakistan’s largest Independent Power Producer (IPP), in its notice to the Pakistan Stock Exchange (PSX) on Wednesday.
“Upon the request of the task force constituted under the Prime Minister’s Office, to revise the tariff and to convert the existing tariff to ‘Hybrid Take and Pay’ model, Narowal Energy Limited (NEL), a wholly owned subsidiary of the HUBCO, has executed an Amendment Agreement dated February 14, 2025 with the Government of Islamic Republic of Pakistan (GoP) and the Central Power Purchasing Agency (Guarantee) Limited (CPPA) to implement the proposed amendments,” read the statement.
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Sharing salient terms and conditions, Hubco shared that the Amendment Agreement shall be effective from November 1, 2024.
The indexation mechanism of O&M has been changed, whereas tariff of cost of working capital and O&M have been revised, it added.
Under the new terms, the return on equity tariff component will be paid in a hybrid take and pay mode. Moreover, the insurance premium tariff is capped at 0.9% of EPC cost.
“GoP will unconditionally withdraw arbitration under Arbitration Submission Agreements, whereas, CPPA will make the payment of outstanding receivables as of October 31, 2024 within 90 days of approval of the agreement by the cabinet.”
It said that under the new terms, waiver of outstanding late payment interest as of October 31, 2024 and LCIA Arbitration clause in PPA will be substituted with Islamabad seated arbitration under the local laws.
HUBCO saw its profit decline by over 68% to Rs5.48 billion in the quarter that ended December 31, 2024.
Consequently, earnings per share (EPS) decreased to Rs3.25 per share in the period under review compared to Rs11.78 per share in the same period last year (SPLY).
The company announced a cash dividend of Rs5 per share i.e. 50%.
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