Pakistan's market operator in the power sector has reportedly sought Rs 100 billion for a revolving account for coverage of payment to Chinese Independent power producers (IPPs) for 5-6 months as per revolving account agreement (RAA), media reports said citing sources.
Well-informed sources from Central Power Purchasing Agency-Guaranteed (CPPA-G) told Business Recorder about this request made to the Chinese IPPs. It is pertinent to note that Chinese power producers have been dismaying for the last year over delayed payments.
They have urged the government of Pakistan to open a revolving account to resolve the issue which has already halted new investment in Pakistan, sources told Business Recorder.
In this regard, the Chinese ambassador to Pakistan and Chinese companies have held meetings with the Prime Minister, Finance Minister, Power Minister and other concerned authorities for the resolution of the payment issue however the payment issue remains to be unsettled.
Article 5 of the China-Pakistan Economic Corridor (CPEC) Energy Project Cooperation Agreement, all the direct or indirect expenses incurred in maintaining this revolving account would be compensated by the power producers through a discount arrangement to be mutually agreed, reported Business Recorder.
"CPEC projects/ IPPs have been continuously approaching CPPA-G for early resolution of their payment issues," the sources said to the media portal.
According to an estimate by CPPA-G, monthly estimated funds required for Revolving Account are to the tune of Rs 19.348 billion, the sources said, adding that CPPA-G is of the view that Rs 50 billion for Revolving Account initially proposed by Power Division is insufficient and should be increased to Rs 100 billion.
"RAA is for coverage of 22 per cent of the invoices raised by the IPPs and guarantee of Rs 100 billion will cover payments shortfall of 5-6 months in case IPPs withdraw funds on a monthly basis, which is quite likely in the current scenario, and the CPPA will not be in a position to replenish the Account," the sources maintained.
( With inputs from ANI )
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