Two panels formed to formulate proposals

ISLAMABAD: The government has constituted two high level panels to formulate proposals for least financially onerous outcome of disputes and out-of-court settlements with Independent Power Producers (IPPs), well-informed sources told Business Recorder.

The Central Power Purchasing Agency Guaranteed (CPPA-G) has certain issues pending with the nine IPPs viz: (1) Hub Power Company Limited (Hubco – LCIA Arbitration ;(ii) ) Orient Power Company (Private) Limited – LCIA Arbitration ;(iii) Atlas Power Limited – LCIA Arbitration ;(iv) Halmore Power Generation Company Limited – LCIA Arbitration ;(v) Liberty Power Tech Limited – LCIA Arbitration ;(vi) Nishat Chunian Power Limited – LCIA Arbitration ;(vii) Nishat Power Limited – LCIA Arbitration ;(viii) Saif Power Limited – LCIA Arbitration and; (ix) Sapphire Electric Power Company Limited – LCIA Arbitration .

According to sources, disputes raised by the IPPs relate to delay in payments from power purchaser – CPPA-G. According to the IPPs, this delay in payments from the power purchaser adversely affected their financial ability, preventing them from purchasing fuel to generate electricity. Due to lack of fuel, Power Division argued that the IPPs were not in a position to generate electricity and were thus not entitled to capacity payments.

The IPPs, however, claimed that they were entitled to a “deemed capacity” as per their interpretation of the Power Purchase Agreements (PPA) wherein, though they lacked the fuel to generate electricity, they were nonetheless “technically available” and thus entitled to the capacity payments.

Published in Business Recorder, 11th May, 2018