ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has hired a firm for forensic audit of 225 MW dual fuel Halmore Power Company after the former refused to revise the Power Purchase Agreement (PPA) through negotiations.
In a letter to Power Division, Nepra’s Deputy Director, Junaid Altaf Bhatti referred to its own letter of August 9, 2025 whereby Power Division was requested to provide information regarding a Nepra Generation licencee Halmore Power Generation Company Limited (HPGCL).
According to Nepra, despite lapse of time period specified in the Nepra letter, the requested information has not been provided to Nepra by Power Division.
Revised terms rejected: Nepra hiring firm to conduct Halmore’s forensic audit
Nepra has requested Power Division again to provide the information mentioned in the Nepra letter of August 09, 2025.
In December 2024, the government of Prime Minister Shehbaz Sharif received a formal notification regarding a claim from the owner of Halmore Power Company. This claim is made pursuant to the Bilateral Investment Treaty (BIT) between Pakistan and the United Kingdom and Northern Ireland, aimed at promoting and protecting investments. The notification is dated November 30, 1994.
Karim-Ud-Din, a British national, is a protected investor under Article 1(c) of the BIT. He has made significant investments in Pakistan, which are protected under Article 1(a) of the BIT. Mr. Karim-Ud-Din is the owner of Halmore Power Generation Company Limited, directly holding 99.9% of its shares. Halmore has successfully operated in Pakistan for the past twenty years and has contributed to the country’s electricity market.
In 2002, Pakistan adopted a new policy for power generation projects aimed at attracting investments to resolve the ongoing electricity shortage. The policy provided various sovereign guarantees, including (i) a guaranteed rate of return on equity and (ii) state payments not only for electricity supplied to the grid but also for available generation capacity (the “take or pay” model).
Halmore’s shareholders, along with other independent power producers (IPPs), were invited to invest in Pakistan’s energy sector under this policy. Halmore was incorporated on March 31, 2005, and received its Generation License on September 4, 2006. Halmore subsequently entered into several agreements with Pakistan and its state entities, benefiting from guarantees provided by the 2002 policy. These included (i) the Power Purchase Agreement with the National Transmission and Despatch Company Limited on April 28, 2007, (ii) the Implementation Agreement with the President of Pakistan on October 23, 2007, and (iii) the guarantee issued by Pakistan on April 30, 2008.
Under these agreements and assurances from Pakistan, Halmore constructed and began operating a 225 MW dual-fuel combined power plant in Sheikhupura, which entered commercial operation on June 25, 2011. The project required substantial investments, totaling nearly $100 million.
According to the notification, despite Pakistan’s commitment to a 30-year period of assurances—lasting at least until June 24, 2041 — Pakistan has gradually reneged on its promises to some IPPs, including Halmore. In 2021, Pakistan forced Halmore to accept several concessions, including a reduction of its guaranteed rate of return from 15% to 12%, which caused a financial loss of at least $52 million over the remaining term of the project.
Copyright Business Recorder, 2025
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