ISLAMABAD: The Power Division is said to have paid Rs 300 billion to private sector and public sector power plants till June 30, 2023 aimed at bringing down the stock of circular debt from Rs 2.646 trillion as of May 31, 2023 to Rs 2.370 trillion as of June 30, 2023, well-informed sources told Business Recorder.
Finance Ministry, sources said, has issued a GoP guarantee in respect of fresh refinancing facilities amounting to Rs 283.287 billion from a consortium of four banks.
Of total amount of Rs 283.287 billion, the share of Habib Bank Limited (HBL) was Rs 115.969 billion, followed by Allied Bank Limited (ABL) Rs 110.283 billion, National Bank of Pakistan (NBP) Rs 44.534 billion and Meezan Bank Limited (MBL) Rs 12.500 billion.
Swelling circular debt also affects NPPs
According to sources, Ministry of Law and Justice has also cleared draft guarantees from legal point of view after making few amendments/ deletions, subject to fulfilment of all codal formalities.
Finance Ministry argued that Power Division/ Power Holding Limited (PHL) may ensure/ certify that the guarantees are in line with the term sheet approved by it and as amended by the Law Division.
Central Power Purchasing Authority-Guaranteed (CPPA-G) has disbursed Rs 142 billion to IPPs which includes wind, solar, hydel, gas and furnace oil power plants in order to reduce the stock of circular debt.
Of Rs 142 billion, Government made payment of Rs 44.68 billion to coal-fired plants, Rs 39.45 to RLNG run plants, Rs 20.90 billion for fuel oil plants, Rs 13.5 billion for gas run and Rs 11.4 billion for nuclear power plants
A senior official of Power Division confirmed the list of over four dozen projects which have been released outstanding due payments before the end of FY 2022-23.
A representative of Independent Power Producers (IPPs) told this scribe that the government has also made payments to IPPs over and above Rs 142 billion.
As per official documents of CPPA-G, circular debt stock grew by Rs 394 billion during FY 2022-23 with average monthly flow of 35.8 billion as compared to flow of Rs 27 billion during the corresponding period of 2021-22.
The Economic Coordination Committee (ECC) has also relaxed conditions to allow use of Rs20.726 billion as advance payments to clear liabilities of IPPs established under China Pakistan Economic Corridor (CPEC) before June 30, 2023.
Copyright Business Recorder, 2023