KAPCO Seeks License Renewal As Plant Likely to Work for Another Decade

Kot Addu Power Company (KAPCO) is working swiftly to renew its Power Purchase Agreement (PPA) with the Power Division, reported Business Recorder.

Top management of the power company claims that the plant will be operational for another ten years and wants to expedite its PPA renewal as soon as possible.

“We have conducted a comprehensive study on a plan for its remaining and technical life which suggests that it can be operated for at least another 10 years,” KAPCO’s chief executive Aftab Mahmood Butt said.

In a letter to the Secretary (Power Division), KAPCO’s chief executive cited an earlier letter dated June 13, 2022, titled Power Purchase Agreement of KAPCO, which is set to expire on October 24, 2022, just a few weeks from now.

He intimated the Power Division to enter into good-faith negotiations for the renewal of the PPA in June 2019 and has since been continuously seeking a consent letter. The matter has not been resolved due to a variety of factors including the early stages of COVID and issues related to Pakistan’s power sector.

The top executive also claimed that despite its overdue receivables from the power purchaser being in the billions, KAPCO has been continuously supporting the system by providing the required amount of power.

Considering the plant’s condition, fuel flexibility, and system constraints, KAPCO is confident that it can still contribute to the national interest on very appealing and beneficial terms.

Furthermore, regardless of generation from the KAPCO plant, the power purchaser/NTDC uses the company’s switchyard for the 220kV-132kV step-up/step-down facility. The completion of the commercial arrangements on time will ensure its availability to serve, but any failure or delay in the system may disrupt supply, particularly in southern Punjab.

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