The Economic Coordination Committee (ECC) of the Cabinet is likely to allow Alternative Energy Development Board (AEDB) to amend Supplemental Agreement to Implementation Agreement for CPEC alternative energy projects, well informed sources told Business Recorder. Giving details, the sources said, the ECC on February 18, 2016 had approved the draft Supplemental Agreement to Implementation Agreement (SAIA) for CPEC projects being processed by AEDB.
The SAIA provides for the opening of a revolving account by the power purchaser into which such payments are to be deposited in order to ensure an amount equal to 22% of the monthly invoiced amounts under the EPA is maintained. The standard ECC approved SAIA is structured to be signed after the signing of the Implementation Agreement (IA) but prior to the Financial Closing (FC) of the project. The following wind and solar power projects are included in the CPEC agreement:
(i) Hydrochina Dawood Power Ltd. Wind Power Project of 50MW at Gharo, District Thatta, Sindh, achieved COD; (ii) Sachal Energy Development (Pvt.) Ltd. 50MW Wind Power Project at Jhampir, District Thatta achieved COD; (iii) UEP Wind Power of 99MW at Jhampir, District Thatta, achieved COD; (iv) Three Gorges Wind 2x50 Power Projects at Jhampir, achieved FC and is under construction; and (v) solar power projects of 1000MW at Quaid-e-Azam Solar Park, Bahawalpur, 300MW achieved COD.
The sources said, apart from the 2x50MW wind power projects by M/s Three Gorges, all other wind power projects achieved their Financial Closing prior to the above referred approval of the ECC for extension of facility of SAIA to all projects included in CPEC and approval of draft SAIA. The 2x50 MW wind power projects by M/s Three Gorges also achieved Financial close in April, 2017.
M/s UEP Wind Power Pvt. Ltd., M/s Three Gorges Second Wind Farm Pakistan Pvt. Ltd. and M/s Three Gorges Third Wind Farm Pakistan Pvt. Ltd have now requested for signing of SAIA with AEDB. Since the five projects have already achieved Financial Closing and some have also achieved COD, certain amendments would be required in the SAIA where references are made to Financial Closing and COD, owing to the fact that the projects have already achieved these milestones, in order to execute the SAIA with the said projects and enable opening of revolving fund for these projects as per the terms of CPEC agreement. These amendments would not increase the obligations or liabilities of the GoP beyond those stipulated in The SAIA.
Keeping in view projects' advance position, AEDB has recommended that it should be authorized to make necessary amendments in the SAIA as per the current status of the projects. The ECC is expected to approve the proposal in its forthcoming meeting.
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