Alarming note from Member (Law): Nepra registers CPPA-G as agent for Discos, KE

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has registered the Central Power Purchasing Agency–Guaranteed (CPPA-G) as agent for Discos and K-Electric amid an alarming note from Member (Law).

According to the licence issued by Nepra, in exercise of the powers conferred by Section 25A of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), as amended from time to time, the Authority has granted registration to CPPA-G (Corporate Universal Identification No. 0068608) to act as an agent of Discos and K-Electric Limited to govern and ensure the smooth administration and settlement of legacy contracts, subject to and in accordance with specified terms and conditions.

Member (Law) Amina Ahmed, in her additional note, stated that while the exact date of CMOD is not known, it is expected in October this year.

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Assuming, for the purposes of this note, that CMOD is on October 27, 2025, it would mean that all generation projects currently under development — which have met all legal requirements (the Act, Rules, Regulations, guidelines, codes, standards, etc), conform to the power policy and plan, are committed or optimized in the IGCEP, included in the power acquisition programme, and have obtained all necessary approvals, consents, authorizations, and licences — will, from October 28, 2025, be unable to proceed with their projects as they will not be able to sign a PPA/EPA.

In other words, a project that has managed to navigate all the numerous regulatory and procedural hurdles and received approvals at every stage will now have to be temporarily or permanently shelved, as after October 28 it will no longer have a bankable contract or a purchaser. The issue, she stated, is not that a PPA/EPA with Discos may increase the risk for generation companies — as these companies can assess their own risk appetite and decide whether to proceed — but rather that, even if a project is willing to enter into such a PPA/EPA, no such agreement currently exists and no Disco is ready to sign it.

She further stated that although an exercise for developing standardized PPA/EPA templates for execution between Discos and generation companies was reportedly initiated in 2021–22, it remained at a nascent stage. To date, the security package has not been finalized despite multiple communications from NEPRA to the relevant entities.

“My concern on this matter is not project-specific. I do not even know if there are any such projects that are otherwise ready and will be adversely affected only by this. If we, as a country, believe that we do not need any further addition to generation capacity for some time, we should stop processing such projects — there is absolutely no justification for adding more generation if it is not required.

On the flip side, however, if we do want all or some of the projects under development to proceed to commercial operations, we should stop creating new hurdles at every corner. This is a complete failure on the part of those responsible for developing the new security package and ensuring the Discos’ readiness.”

Copyright Business Recorder, 2025