The Economic Coordination Committee (ECC) of the Cabinet Tuesday allowed Power Division to raise Rs 200 billion from a syndicated Islamic Term Finance Facility to deal with the circular debt accumulated to over Rs 807 billion till December 31, 2018. The meeting presided over by Finance Minister Asad Umar in a presentation by the Ministry of Energy, Power Division, on the current situation of circular debt and the components that have contributed to its buildup was informed that outstanding payables in the power sector included energy cost, capacity charges and others, as well as interest payment.
The ECC after a detailed discussion allowed the ministry to proceed with the raising of syndicated Islamic Term Finance Facility of Rs 200 billion for which term sheet had already been received from a consortium of Islamic Banks.
Sources said that some operation issues and documentations required for the issuance of bonds have been completed and a separate desk for repayments of amount would be set up in the State Bank of Pakistan.
An official also maintained that identification of assets of power sector has also been completed for raising funds. They added that initially 43 assets, pieces of land and buildings of generation and distribution companies, etc, were identified and later on two more were added to the list of assets.
Sources said that Meezan Bank is leading the consortium of Islamic banks and there is also a possibility that other banks may also join the consortium after completing the requirements.
The ECC also approved Ministry of National Food Security's proposal for allowing the export of 0.5 million tonnes of surplus wheat/ wheat products by Pakistan Agriculture Storage and Services Corporation (PASSCO) for which it has received tenders.
The decision was made keeping in view the rising prices of wheat in the international market, sufficient available stocks (1.7 million tonnes) and the predictions of a good crop in the current season.
In a proposal to the ECC, the ministry said in order to create physical and fiscal space for new wheat procurement, PASSCO may be allowed to export the remaining 0.5 million tonnes of surplus wheat/wheat products. Out of this, 0.4 MMT may be exported through seas and 0.1 MMT through land route, on the ECC earlier approved methodology dated 20.11.2018 on the basis of that either PASSCO may be allowed to export wheat on basis and price offered in its earlier bid held on 11.1.2019 as it would save one month bid time or PASSCO may be directed to initiate afresh bidding process which will be time consuming.
The Ministry of ITT (Information Technology and Telecommunications) briefed the meeting on the annual budget of NTC. The committee after a discussion directed the Ministry of ITT to address the management issues of the NTC on priority in view of the unsatisfactory responses to the queries raised by members of the committee.