ISLAMABAD:* The National Electric Power Regulatory Authority (Nepra) has admitted a joint tariff reduction application filed by seven Independent Power Producers (IPPs) under the *Power Generation Policy 2002, in collaboration with the **Central Power Purchasing Agency-Guaranteed (CPPA-G). The proposal aligns with agreements made with the *Government’s Task Force on Power Sector Reforms.
The seven IPPs seeking tariff adjustments include:
- Nishat Chunian Power Limited
- Nishat Power Limited
- Narowal Energy Limited
- Liberty Power Tech Limited
- Engro Powergen Qadirpur Limited
- Sapphire Electric Power Limited
- Saif Power Limited
The *Task Force, headed by **Federal Minister for Power Sardar Awais Khan Leghari, also includes **SAPM on Power Muhammad Ali, National Coordinator Lt General Muhammad Zafar Iqbal, Chairman Nepra, CEO CPPA-G, Managing Director PPIB, and sector experts. The government claims the renegotiated contracts will *save Rs 1.4 trillion over the remaining lifespan of these projects.
Key Terms of the Tariff Reduction Agreement:
- Effective Date: November 1, 2024
- O&M Indexation: Mechanism revised
- Working Capital & O&M Tariff: Rebasing applied
- Return on Equity: Paid under hybrid take-and-pay model
- Insurance Premium: Capped at 0.9% of EPC cost
- Profit Sharing: Adjustments against CPPA receivables till FY 2023
- Government Arbitration Withdrawal: Arbitration cases to be dropped
- Outstanding Receivables: Payments due by *October 31, 2024, to be cleared *within 90 days of Cabinet approval
- Delay Payment Waiver: Up to October 31, 2024
- Arbitration Clause: London Court of International Arbitration (LCIA) to be replaced with Islamabad-seated arbitration under local laws
Of the 16 IPPs under the 2002 policy, one IPP—Halmore—refused to sign the agreement, alleging government coercion. The government has since directed Nepra to conduct a forensic audit of Halmore’s power plant. Nepra has invited public comments from stakeholders and affected parties and will hold a public hearing on March 24, 2025.
Story by Mushtaq Ghumman
