Govt Convinces All 47 IPPs to Sign Master Agreements

All 47 independent power producers (IPPs), who had signed memorandums of understanding (MOUs) with the Federal Government in August 2020, have now initialed legally-binding Master Agreements.

These MoUs were signed to pave the way for a discounted tariff of Rs. 836 billion in the next 10-12 years. While most IPPs had already come on board in the past weeks, the process was completed today, with the last batch of six IPPs also initialing the Master Agreements on Monday.

These six IPPs were holding out the initialing of the agreement because they were seeking resolution of the issue of excess profit of Rs. 53 billion through a local arbitration tribunal.

These six IPPs signed the Master Agreements after written assurance from the government that the alleged Rs. 53 billion excess profit made by these IPPs would be resolved by the local arbitration tribunal within five months.


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However, now with them on board, along with other IPPs that had already signed agreements, the Economic Coordination Committee (ECC) and Federal Cabinet will approve the new power purchase agreements (PPAs) after IPPs get the nod from their board of directors (BODs).

The IPPs and the government have also agreed that the government would pay the dues worth Rs. 450 billion, owed to the IPPs, in two installments.

The official statement says that the government negotiation teams and the remaining six IPPs have also agreed to the terms of the legally-binding Master Agreement.

This is a milestone achievement for the government as all the 47 IPPs are on board. The formal signatures will be done between government officials and IPPs after the approval of the Federal Cabinet and the respective boards of the IPPs.



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