ISLAMABAD: The Finance Division has granted permission to the Power Division to withdraw Rs4 billion from the Pakistan Energy Revolving Account (PERA) for the exclusive payment to Independent Power Producers (IPPs) under the China Pakistan Economic Corridor (CPEC) for January 2024, according to reliable sources.
On February 7, 2024, the Power Division sent an Office Memorandum (OM) to the Finance Division, seeking approval to draw funds from PERA in line with the decision of the Economic Coordination Committee (ECC) of the Cabinet on October 31, 2022.
The ECC had approved the establishment of PERA with an allocation of Rs50 billion at the State Bank of Pakistan, with CPPA-G authorized to withdraw a maximum of Rs4 billion per month.
Meanwhile, the country’s power sector recorded a total of Rs2.551 trillion during the first six months of the fiscal year 2023-24, representing a 10.5 percent monthly growth with Rs40 billion.
Regarding payments to Chinese IPPs, the caretaker Minister for Power and Petroleum, Muhammad Ali, informed Chinese authorities during a recent visit that significant progress had been made, with 88 percent of outstanding payments already settled. However, Port Qasim Electric Power Company (PQEPC) expressed concerns over delayed payments, with receivables reaching Rs88.38 billion by February 26, 2024.
PQEPC highlighted liquidity issues and urged immediate measures to reduce outstanding amounts. Additionally, a Settlement Agreement for revolving the CPP deduction issue is underway, which would further increase the owed amount by Rs13.6 billion.
CEO Guo Guangling emphasized the need for timely settlement to ensure sustainable power generation and avoid defaults on loan agreements and government sovereign guarantees.
Story by Mushtaq Ghumman
