ISLAMABAD: The Private Power and Infrastructure Board (PPIB) is set to decide the fate of a 300MW coal-fired power project in Gwadar, proposed by a Chinese company, during its board meeting scheduled for Thursday (today), sources in PPIB told Business Recorder on Wednesday.
The decision comes at a time when the government has already approved the establishment of a 100MW solar photovoltaic (PV) power project in Gwadar, utilizing confiscated solar panels recovered by the Federal Board of Revenue (FBR).
The proposed 300MW coal plant – a key part of the China-Pakistan Economic Corridor (CPEC) – is facing significant financial and regulatory roadblocks. In a detailed letter to PPIB, M/s CIHC Pak Power Company Limited (CPPCL), the project’s sponsor, outlined several challenges threatening the project’s viability.
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CPPCL Chairman Zhao Bo raised concerns over prolonged delays in regulatory approvals, foreign exchange losses, and restrictions on currency conversion, all of which have made the project commercially unviable in its current form.
In his letter to PPIB Managing Director Shah Jahan Mirza, Zhao stated that CPPCL had submitted its Performance Guarantee (PG) on March 21, 2025, fulfilling all conditions necessary to extend the project’s Letter of Support (LoS) until March 31, 2028.
Despite this, the company received a notice from PPIB demanding payment of a Financial Closing Date (FCD) extension fee – a move CPPCL claims contradicts Clause 5 of the 2019 LoS, which exempts sponsors from such fees in cases of delays caused by government agencies or unforeseen circumstances.
Zhao argued that the delays qualify as force majeure events, citing government-related bottlenecks and invoking legal principles of contractual reciprocity.
He also referenced Clause 3A of the 2018 Fee Regulations, which allows fee exemptions in cases where delays are beyond the sponsor’s control – especially under the revised IGCEP (Indicative Generation Capacity Expansion Plan) timelines.
The company further stated that it has already invested over USD 22 million in project development – more than double the cost threshold approved by NEPRA – and has paid USD 1 million in PPIB processing fees. Imposing additional charges, Zhao warned, could jeopardize the project’s future.
To avoid further delays, CPPCL agreed to pay the USD 150,000 extension fee under protest, explicitly reserving its right to seek compensation, recover losses, or pursue legal remedies.
CPPCL called for urgent intervention by PPIB to uphold the intent of the LoS and facilitate the continuation of the project under the broader CPEC framework. The company reiterated its commitment to working with relevant authorities on practical solutions to keep the project on track.
In addition to the Gwadar project, the PPIB Board will also deliberate on several other key agenda items, including: The Board will also discuss another key issue which is related to Engro Power Gen Qadirpur Limited, Gas Depletion Mitigation Plan/ Option, IT intervention for IAA under component-IV of EDEIP and PPIB’s ICT activities under National Electricity (NE) Plan 2023-27.
PPIB employees’ service regulation 2025, audited accounts for the year ended June 30, 2024, PPIB annual report 2023-24 and code of conduct for its Board members and employees is also part of the agenda to be considered by the Board.
Copyright Business Recorder, 2025
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