Govt Pays Off Rs. 142 Billion Pending Dues to IPPs

The Central Power Purchasing Authority (CPPA) has disbursed Rs. 142 billion to Independent Power Producers (IPPs) in order to reduce the stock of circular debt. The development is in line with the International Monetary Fund’s (IMF) recommendation of reforms and progress in the energy sector in a recently signed staff-level agreement for the SBA facility amounting to $3 billion, according to a report by Arif Habib Limited (AHL). To recall, the government also paid Rs. 385 billion to IPPs of PP 1994 and PP 2002 last year. Port Qasim Electric Power Company Ltd (PQEPC) got Rs. 8.32 billion, Engro Powergen Thar Limited Rs. 4.31 billion, National Power Parks Management Company Private Limited Rs. 22 billion, China Power Hub Generation Company (Private) Limited Rs. 9.21 billion, and Karachi Nuclear Power Plant-Unit-2 Rs. 8.75 billion. The full breakup of disbursements is as follows:   As per the Ministry of Energy monthly report, during 11MFY23, the stock of circular debt increased by Rs. 394 billion to Rs. 2,646 billion (Monthly average: Rs. 35.8 billion) compared to a decline of Rs. 27 billion during the same period last year. Out of the total Rs. 394 billion increase, Rs. 249 billion has been added by recovery losses of DISCOs followed by Rs. 171 billion of quarter tariff adjustments (QTA) and fuel charges adjustments (FCA). Moreover, an amount of Rs. 128 billion has also been provided through fiscal space. Among the listed IPPs, HUBC, NEL (a subsidiary of HUBC), TEL (a subsidiary of HUBC), LEL (a subsidiary of HUBC), NPL, LPL, KAPCO, ROUSCH (a subsidiary of ALTN), NCPL, EPQL, PKGP, and SPWL received the payment, said AHL in its report. The details of payments are given below: Besides the listed IPPs, CPHGC (an associate of HUBC), LEPL (a subsidiary of LUCK), EPTL (a subsidiary of ENGRO), and TNPL (an associate of HUBC) also received an amount of Rs. 9.2 billion, Rs. 5.5 billion, Rs. 4.3 billion, and Rs. 1.3 billion, respectively. According to the report, NPL has a room of Rs. 5.65 per share (Rs. 11.17 at zero payment of liabilities) for dividend payment after paying its all liabilities. HUBC can pay Rs. 10.79 per share if the company does not pay its liabilities. KAPCO also received Rs. 4.3 billion and may announce a dividend amounting Rs. 5.0 per share. NCPL received Rs. 1.6 billion but it has Rs. 6.2 billion for short-term borrowings and payables.