ISLAMABAD: As Prime Minister Shehbaz Sharif embarks on a four-day official visit to China, Chinese power generation and transmission companies are intensifying their demands for the payment of overdue amounts. The Central Power Purchasing Agency–Guaranteed (CPPA-G) recently paid Rs 70 billion to Chinese Independent Power Producers (IPPs) and plans another installment soon, aiming to clear substantial dues before June 30, 2024.
The outstanding dues for CPEC power projects total approximately Rs 550 billion. This issue was a focal point during recent visits to Beijing by Deputy Prime Minister Ishaq Dar and Federal Minister for Planning, Development, and Special Initiatives, Ahsan Iqbal, who oversees CPEC projects.
Port Qasim Electric Power Company (PQEPC) reported its dues reaching Rs 94.5 billion ($340 million) by May 23, with delayed payments exceeding six months. The company has initiated a Settlement Agreement to resolve Capacity Power Purchase (CPP) deductions due to foreign exchange non-availability, potentially increasing the amount by Rs 13.6 billion.
Prime Minister Sharif received a letter from former Qatari Prime Minister Sheikh Hamad Bin Jasim Bin Jaber Al Thani, requesting $450 million for PQEPC, which operates a 1320-MW coal power plant at Port Qasim. Shanghai Electric’s Thar Coal Block-1 Integrated Energy Project stressed the need to deposit $79 million into the Debt Service Account (DSRA) as per the Term Facility Agreement, warning of penalties and higher costs if delayed.
Engro Thar highlighted that its dues from CPPA-G have surged to Rs 76 billion, requesting an additional Rs 15 billion for immediate payment, of which 50 percent has been paid. CHIC Pak Company Limited expressed concerns over the viability of the tariff determination for its 300-MW coal-fired power plant at Gwadar.
Pak-Matiari Lahore Transmission Company (Private) Limited (PMLTC) reported overdue payments amounting to Rs 56.6 billion, with Rs 46.966 billion already overdue. Sinosure, a key Chinese state-owned insurance company, echoed concerns from other Chinese financial institutions and government officials regarding the delays.
Prime Minister Sharif’s visit is expected to address these critical financial issues and seek resolutions to ensure the continuity and stability of Chinese investment in Pakistan’s power sector.
Story by Mushtaq Ghumman
