ISLAMABAD: In a new development, sanity has prevailed as the Energy Division has withdrawn the ECC’s brief, which it previously submitted asking to stop paying fees to IPPs installed in 2002 unless the NAB completes its investigation against ‘ some power plants. ‘ He had also asked in the summary that the process of creating an arbitration court to settle the excess earnings of 55 billion rupees be stopped until the completion of the NAB investigation.
The withdrawal of the summary has taken place as the Energy Division feels the heat of the ‘powerful circles’ that played a fundamental role in obtaining the discounted rate of 47 IPP with an impact of Rs 836 billion in the next 20 years. The summary prepared by the Energy Division has left IPPs and the government negotiating team with representation from ‘powerful circles’ in total shock, as 47 IPPs had volunteered to bail out the government while offering alterations. in its power purchase agreements (PPA).
However, this correspondent repeatedly contacted the Special Assistant to the Prime Minister at Power Tabish Gauhar and sent him a questionnaire on the rationale for submitting the Energy Division summary to the ECC, requesting defaults from IPPs and keeping the process on hold. of the arbitration tribunal, but did not reply.
However, the chief executive officers (CEOs) of many independent power plants (IPPs) installed under the 2002 Power Policy, while speaking to The News, said that they still have the right to move the London International Court of Arbitration (LCIA ) if the government adopts a discriminatory policy by paying the 403 billion installments in two installments. “Paying 40 percent of fees as the first installment is a very operational part of the finalized agreement with the government and if it does not pay or is linked to the completion of the NAB investigation into some ‘unscrupulous’ IPPs for profit illegal, the revised agreements will be considered null and void ”. CEOs said that until the government pays 40 percent of the $ 403 billion dues, the revised deals will not be effective and the status quo will continue. And if the government pays the fees to the IPPs installed under other energy policies and they (the IPPs under the 2002 Energy Policy) are not paid, they will have the right to move into the LCIA. The IPPs said that it is the government and its negotiating team that agreed that a local arbitration would be formed to solve the problem of excess profits of 55 billion rupees. “Now, the Energy Division’s attempt to stop the payment of fees and stop the constitution process of the local arbitration court is like a step back from the revised agreements that are awaiting implementation.” The CEOs argued that the Memoranda of Understanding and Framework Agreements have already been approved by the CCOE, the ECC and the federal cabinet, but now the Energy Division is putting the entire process in jeopardy.
Sources said that of 47 IPPs, 30 IPPs have signed the revised contracts, but of 30, the IPPs installed in 2002 are denied payment of their fees, which is equivalent to eliminating the entire exercise to achieve the discounted rate of the PPIs in a bid to make the energy sector sustainable. However, 17 wind IPPs have refused to sign the amended PPAs, as the foreign lenders of those IPPs want the power plants installed under the CPEC umbrella to sign the revised contracts first.
Foreign lenders of 17 wind IPPs want the government to inform them about the reform program in the energy sector and steps to make Pakistan’s energy sector sustainable and secondly, they want the government of Pakistan to get the discount on the rate of IPPs set under the CPEC, a senior official familiar with the latest developments told The News. The official said that the authorities have told them that the package of reforms in the electricity sector that has been shared with the World Bank will be shared with foreign lenders and they are ready to inform them on this front. The 17 wind IPPs that are showing resilience by assigning revised PPAs include FFC Energy, Zorlu Energji, Foundation Energy-1, Foundation Energy-II, Sapphire Power, Yunus Energy, Metro Power, Tenaga Energy, Master Energy, ACT Wind, Gul Ahmad Energy, Artistic Energy, Hawa Energy, Jhimpor Power, Tricon Boston Consulting-A, Tricon Boston Consulting-B, and Tricon Boston Consulting-B.
The government has already calculated the 47 PPI fees at Rs 403 billion which it will pay in two installments. And out of 403 billion rupees, the government will pay 41,096 billion rupees to 17 PPIs for wind power.