The government has completed the first payment transaction of 40 per cent to 20 Independent Power Producers (IPPs) amounting to Rs89.2 billion equally divided in cash 5 years’ Sukuk and 10 years’ PIBs.
“In compliance with the directives of the Prime Minister and under guidance of the Finance Minister, the government has completed the first payment transaction of 40 per cent to 20 IPPs amounting to Rs. 89.2 billion equally divided in cash 5 years’ Sukuk and 10 years’ PIBs,” Ministry of Finance stated on Friday. Finance Division has completed this transaction in coordination with relevant organisations / departments including State Bank of Pakistan and Power Division.
“I am pleased to inform that the first payment transaction, approved by the government of 40 per cent to 20 IPPs amounting to Rs 89.2 billion have been completed in coordination with SBP and Power Division.
This shows our commitment to resolve this longstanding issue on a permanent basis,” said Special Assistant to the Prime Minister (SAPM) on Power & Petroleum Tabish Gauhar on twitter.
In May this year, the Economic Coordination Committee (ECC) of the Cabinet had approved the payment of first installment 40 per cent of payable amount to IPPs as these stood on November 30, 2020 of Rs 89.66 billion under the payment mechanism to the IPPs under Pre-1994, 1994 and 2006 Power Policies and the same was ratified by Cabinet on May 18, 2021. The ECC approved payment of first installment to 35 IPPs out of total 47 and decided to withhold payment to the remaining 12 IPPs (under the Power Policy 2002) owing to the National Accountability Bureau investigation.
It is worth mentioning here that the government has to pay Rs 403 billion to 47 IPPs by December 2021, of which first instalment of 40 per cent of the agreed amount i.e. Rs180 billion was to be paid to all the IPPs but since payment of 12 IPPs established under 2002 policy has been withheld, now Rs90 billion will be paid to 35 IPPs. As per the agreement, the government had to pay agreed amounts to the IPPs by March 29, 2021. However, the payment schedule was disturbed after NAB decided to examine the deal.
The first instalment of 40 per cent duly divided in cash, PIBs and Sukuk to be paid to the concerned IPPs shall be adjusted against power sector subsidy claims for FY2019-20 and 2020-21. Similarly, disbursement of remaining 60 per cent will be taken care of in the next financial year.
Power Division has sought Rs90 billion supplementary grant to pay 40 percent agreed amount to IPPs established under Generation Policy 1994 and Generation Policy pre-1994.
