Govt seeks details of working capital facilities availed by Halmore Power since 2010
- PM's Office wants to safeguard govt's interests in international arbitration initiated by M/s Halmore Power Company
ISLAMABAD: The government has reportedly sought complete details of the working capital facilities availed by the M/s Halmore Power Generation Company Limited since 2010 (15 years), including details of the total amount sanctioned /availed, purpose of facilities and particulars of Lien/security interest created against each facility, sources close to Registrar NEPRA told Business Recorder.
The Prime Minister’s Office (PMO) has already directed the Power Division (PD) and the Attorney General for Pakistan (AGP) to act proactively and effectively to safeguard the government’s interests in the international arbitration initiated by M/s Halmore Power Company.
The direction follows a notice of arbitration issued by Mian Karim-ud-Din, owner of the 225 MW Halmore Power Company, who has filed proceedings before the London Court of International Arbitration (LCIA).
Halmore arbitration: PMO directs PD, AGP to shield govt
In this regard, Managing Director, PPIB Shah Jahan Mirza has written letters to commercial banks, namely UBL, Allied Bank Limited, Meezan Bank limited, MCB, Samba Bank Limited, Askari Bank Limited, Bank Al-Habib Limited, Habib Bank Limited, Dubai Islamic Bank Pakistan Limited, Soneri Bank Limited for provision of record within five working days starting from December 22, 2025.
According to PPIB, the letters have reference to Implementation Agreement (IA) of October 23, 2007 entered into by and between the Halmore Power Generation Company Limited and the President of Pakistan, for and on behalf of the Islamic Republic of Pakistan (GoP) in relation to 225 MW (gross ISO) electric power generation plant based on dual fuel i.e. gas and high speed diesel (HSD), located at Bhikki, (Punjab), Pakistan.
Section 11.1 of the Implementation Agreement provides that “except as provided in Section 11.2 (a) [thereof], no assignment or transfer by a party of its rights and obligations under the Implementation Agreement shall be effective without the prior written consent of the other party”. Section 11.2(a) of the Implementation Agreement stipulates that, pursuant to the financing documents (executed between the Company and the term facility/project finance Lenders), for the purposes of financing the Project in connection with the Financial Closing, “the Company may assign or create a security interest in favour of such Lenders in its rights or interests under or pursuant to (a) the Implementation Agreement; (b) any agreement or document comprising or contemplated within the Project agreements; (c) the Complex; (d) the Site; (e) the present and future movable, immovable, and intellectual property of the Company; (f) the present and future revenues, rights, assets or actionable claims of the Company; or (g) any other present or future rights, interests, property, or assets of any nature and wherever situated”. Being a significant and material breach of above terms and conditions, Section 14.1(a)(v) of the Implementation
Agreement or categorically enlists any such assignment or transfer by the Company without obtaining prior written consent from the GOP as a Company Event of Default.
According to Managing Director PPIB, it transpired and later also admitted by the Company in writing, that it has availed certain short- term finance facilities/working capital facilities from various banks/financial institutions, and has created Lien /security interests with respect to its rights and assets listed in Section 11.2(a) of the Implementation Agreement. These short-term finance facilities/working capital facilities have been availed without the prior written consent of GoP and thereby creation of such security interest/Liens by the Company in favour of banks constitutes a Company Event of Default pursuant to the terms of the Implementation Agreement. In this regard, the GoP, through its letter dated December 4, 2025 has also served upon the Company a notice of continuous breach of the terms of the Implementation Agreement.
In view of the existing scenario, banks have been asked to provide complete details of the working capital facilities availed by the Company since 2010, including details of the total amount sanctioned/availed, purpose of facilities and particulars of Lien/security interest created against each facility.
Additionally, if any working capital facility has been rolled over, renewed, or restructured during this time period, to also provide full details thereof alongwith relevant documents. The information and documents should reach PPIB office within five days.
“Notwithstanding the foregoing, the GoP expressly reserves all of its rights to proceed against and avail all legal remedies available to it under Implementation Agreement and applicable laws of Pakistan. Capitalized terms used but not defined herein shall bear the meaning ascribed thereto in the Implementation Agreement, “said the PPIB Managing Director.
Mian Karim-ud-Din formally initiated Investor-State arbitration proceedings against the Government of Pakistan through a Notice of Arbitration served on October 8, 2025.
The arbitration is based on alleged violations by Pakistan of the UK-Pakistan Bilateral Investment Treaty (BIT). The claim amount has not been formally quantified, it is estimated at around USD 80 million. The dispute centres on the claimant’s assertion that Pakistan’s actions adversely affected his investment in the Halmore Power Generation Company.
The claimant seeks declaratory relief for alleged treaty violations, injunctive relief to halt further breaches, and compensation — estimated at USD 80 million — along with interest and legal costs.
Under the dispute resolution mechanism of the BIT, the arbitration will proceed in accordance with the UNCITRAL Arbitration Rules 2021, which requires Pakistan to submit a response to the notice of arbitration within one month of receiving the notice — by November 8, 2025.
Copyright Business Recorder, 2025