Azad Pattan Hydropower Projects Gets 4th Extension in Letter of Support

The Private Power & Infrastructure Board (PPIB) has given the fourth extension in Letter of Support (LoS) to the 700 Mega Watt M/s Azad Pattan Hydropower Project for another year starting from 1 January 2022.

The board issued the first Letter of Support on 30 June 2016, which was thrice amended on 19 September 2018, 27 September 2019, and 26 April 2021.

The project company had requested yet another extension in the Financial Closing Date, and the board has now approved a 12-month extension up to 31 December 2022.

The company submitted a Bank Guarantee amounting to $3,503,500 on 30 March 2022 and its amendment of 15 April 2022, valid up to 31 March 2023, issued by Industrial & Commercial Bank of China Limited, Islamabad Branch, as per the requirements of PPIB. The performance guarantee was paid as a non-refundable processing fee to the PPIB and a bar chart, detailing the timelines of various deliverables during the extended period for achieving Financial Closing, was also submitted.

According to PPIB, now the LoS has been amended subject to the following terms and conditions:

(i) The Project Company shall achieve the Financial Closing no later than 31 December 2022 under and in accordance with the terms of the LoS provided that due to such extension in the Financial Close Date, the Project Company shall not claim nor shall be entitled to any additional cost from GOP/ AJ&K entities.

(ii) In case the project company delays, defaults, or fails to achieve the Financial Closing by the extended Financial Closing Date under and in accordance with the terms of the LoS, PPIB, in addition to any other actions set out in the LoS and the project agreements, shall be entitled to encash the Performance Guarantee in full amount without any notice to or demand on the Project Company in accordance with the terms of the LoS.

(iii) No waiver by the PPIB of any default by the Project Company in the performance of any of the provisions of the LoS shall operate or be construed as a waiver of any other or further default whether of a like or different character.

(iv) The failure by the PPIB to insist on any occasion upon the performance of the terms, conditions, and provisions of the LoS, or time or other indulgence granted by the PPIB to the Project Company, shall not thereby act as a waiver of the breach, as acceptance of any variation, or as the relinquishment of any such right under the Policy, the Performance Guarantee or LoS, which shall remain in full force and effect.

(v) The grant of time through this Amendment shall not affect in any way whatsoever the beneficiary’s rights under the Performance Guarantee and shall not affect in any way whatsoever the Guarantor’s liability there under or discharge the Guarantor or the Project Company from its obligations under the Performance Guarantee. The Guarantor’s obligations and or liabilities under the Performance Guarantee shall continue to be in full force and effect.

(vi) This Amendment No. 4 to the LoS shall be treated as an integral part of the LoS to which it should be attached. The provisions of this Amendment No. 4 shall supersede the provisions of the LoS only to the extent of any inconsistency in relation to matters contained therein.

(vii) This Amendment No. 4 to the LoS shall be effective from 1 January 2022.

(viii) The Project Company represents and warrants to PPIB that it is duly authorized to accept, agree, and enter into this Amendment No. 4 to the LoS and deliver and perform the same in accordance with its terms.

(ix) Save for as amended herein, all other terms and conditions of the LoS shall remain unchanged.

(x) Capitalized terms not otherwise defined herein shall bear the meanings as attributed thereto in the LoS and Performance Guarantee, as the case may be.