ISLAMABAD: Karot Power Company Limited (KPCL) has approached the National Electric Power Regulatory Authority (NEPRA) for the approval of its indexations for the first and second quarters of 2024. The company has been unable to issue invoices totaling Rs 20 billion and faces a fifth debt payment of $100 million due in October 2024.
In a letter to NEPRA Chairman Waseem Mukhtar, KPCL CEO Liu Yonggang highlighted the financial strain the company faces. He explained that after achieving Commercial Operations Date (COD) on June 29, 2029, KPCL submitted a request for a “One-time Adjustment of Tariff at COD” via a True Up petition on September 30, 2022.
The CEO noted that KPCL has already submitted 90% of the project cost along with supporting documents in its tariff petition. The remaining 10% is payable in relation to the EPC contractor’s Retention Money and Taking Over Certificates (TOC) milestones. These payments cannot be settled until the defect liability period is completed, per the EPC contract.
Yonggang emphasized that the Karot Hydropower plant will be transferred to the Government of Pakistan after a 35-year concession period. To ensure the plant’s sustainability and economic benefits, it is crucial that the plant remains technically defect-free. KPCL plans to submit supplemental information to the tariff petition upon finalizing the costs payable.
The company appreciated NEPRA’s interim relief and indexation provisions since COD, which enabled it to manage four debt repayments totaling $271.65 million and cover operational costs and other expenses for 2023 and 2024. KPCL has not used any funds from CPPAG for non-operational purposes, nor declared dividends or transferred funds to associate companies since COD.
Due to pending indexations for Q1 and Q2 of 2024, KPCL has been unable to issue invoices amounting to Rs 20 billion and faces a critical debt payment. The CEO requested NEPRA to approve the indexations to enable KPCL to meet its financial obligations and ensure the smooth operation of the power plant.
Story by Mushtaq Ghumman
