Coal-based power plant abandoned — a year’s work gone to waste

The Kot Addu Power Company — 15 generating units (multi fuel-fired power plant: gas, furnace oil and diesel) with a nameplate capacity of 1,600 megawatts — is the single largest Independent Power Producer (IPP) in the country.

Kot Addu Power Company (Kapco) sells the electricity it produces to a lone customer — Wapda — under a Power Purchase Agreement (PPA). Since the current PPA is valid up to 2021, many energy analysts wonder what would happen after the expiry of the period of the agreement.

When this query was put to the company’s General Manager Finance/Chief Financial Officer, Mr M. Mohtashim Aftab last Thursday, he told this writer that the company was entitled to re-negotiate a new tariff with the government (the National Electric Power Regulatory Authority (Nepra) and the Central Power Purchasing Agency (CPPA-G)) two years before the expiry of the current contract. “It shall be taken up in June 2019”, he said.

There was great enthusiasm on the Kapco’s setting up a 660MW coal-based power project with the then projected cost of $1 billion. Last year, the project site was shifted to Muzaffargarh, from earlier plans to put up the plant in Sheikhupura.

The construction progress slowed down after the government’s sudden ban on fresh investments in power generation based on imported fuel. Mr Mohtashim confirmed last Thursday that the company had to abandon the project.

Published in Dawn, 12th March, 2018