NJHPP may default if PPA not signed by CPPA-G

Business Recorder/27-11-2019

ISLAMABAD: The Neelum Jhelum Hydropower Company (NJHPP) is expected to go into default after December because of the dilly-dallying approach of Central Power Purchasing Agency Guarantee (CPPA-G) in signing power purchase agreement with NJHPP. The NJHPP is Rs. 500 Billion investment projects of Government of Pakistan with the fundamental objectives of providing sustainable long-life cheap energy to the national grid. The Prime Minister of Pakistan in April-2018 ceremoniously inaugurated the project. Since then NJHPP has injected over 6160 million units to the national grid. To save NJHPP from succumbing to financial starvation, sources said NEPRA had given an interim power tariff of Rs 5.9180 per unit of electricity. Also, while considering the tariff below the financial requirements, NJHPP went in to the tariff review request by NEPRA which was also approved and now NJHPP has a duly notified tariff of Rs 9.1184 per unit of electricity in vogue for the electric supply made since July 4th, 2018. According to sources, a staff level agreement had reached between the top tier management of Central Power Purchasing Agency Guarantee (CPPA-G) and NJHPP this year in July 2019 yet CPPA-A is not signing Power Purchase Agreement with NJHPP. Moreover, till to date estimated loss to the government from this unreasonable move of CPPA-G amounts to Rs 56 billion. The amount has been potentially recovered from consumers by Discos, but critically adjusted in circular debt to show efficiency and performance instead of payment to NJHPP.