Independent Power Producers (IPPs) after getting assurance from the government have withdrawn the sovereign guarantee encashment demand. IPPs claim that they have withdrawn the guarantee encashment in the larger national interest.
According to sources at Ministry of Water and Power, Secretary Ministry of Water and Power and representatives of IPPs met last week to settle various issues between the government (Power Purchaser) and the IPPs including the overdue verified and audited amounts due to IPPs under the Power Purchase Agreement.
“The government has shown intention that it will settle the issues with the IPPs. Based on the said assurance, the IPPs wanted to provide all possible support to the government in the larger national interest,” said the source.
Accordingly, the source added, as a gesture of goodwill the IPPs have withdrawn the Guarantee Demand without prejudice to their legal and contractual rights which are not waived. The formal withdrawal has been received by PPIB, the source added.
It is pertinent to mention that 13 independent power producers (IPPs) of the country had invoked sovereign guarantees of government of Pakistan to recover unpaid overdue invoices of more than Rs. 48 billion (out of total outstanding of Rs 414 billion rupees at that time) by submitting the final notice to the government through PPIB on March 2, 2017.
These IPPs that served the final notices for sovereign guarantee include: the IPPs established under the 1994 power policy – LalPir Power (Rs4.552 bn), Pakgen Power (Rs7.778 bn), and Kohinoor Energy (2.306 bn); and those set up under the 2002 power policy – Liberty Power (Rs5.361 bn), Nishat Power (Rs4.881 bn), Attock Gen Ltd. (Rs4.449 bn), Atlas Power (Rs4.555 bn), Nishat Chunian Power (Rs4.16 bn), Hubco Narowal (Rs5.024 bn), Saif Power (Rs1.503 bn), Sapphire Electric (Rs1.396 bn), Orient Power (Rs1.18 bn), and Halmore Power GCL (880m).
Nawaz ka topi drama
They are caught between a rock and a hard place so they have no choice but to withdraw their claim. In any other country if the government refused to settle such a claim it would be considered tantamount to a sovereign default with wide implications for the financial markets.
I’m in the system and believe me, this was just for the sake of National interest. Otherwise it was a mishandled case !