Planning Minister Ahsan Iqbal has ordered the Central Power Purchasing Agency-Guaranteed (CPPA-G) to develop an innovative tool to make 14 percent overdue payments to Chinese independent power producers (IPPs).
The minister gave these instructions while presiding over a meeting of the China-Pakistan Economic Corridor’s Joint Cooperation Committee (JCC), reported Business Recorder.
The meeting was informed that overdue payments to CPEC IPPs currently stand at Rs. 350 billion, or 14 percent of the total amount; however, 86 percent of payments are being made to these IPPs on a regular basis, and CPPA-G noted that this is being improved.
Previously, government agencies, according to sources, proposed clearing overdue payments of Chinese IPPs on the pattern of other IPPs, but the plan was unable to gain approval due to bureaucratic hurdles.
The meeting was briefed that the Chinese side had shared feedback on draught minutes of the 11th Joint Cooperation Committee meeting held in October 2022, which had been forwarded to the respective conveners of Joint Working Groups for comments.
China Power Hub Generation Company (Private) Limited (CPHGC) has requested that CPPA-G allocate the maximum amount of funds to ensure that the company can meet its financial obligations and provide uninterrupted power supply to the national grid.
Pertinently, overdue payments to Chinese IPPs currently stand at $1.5 billion. This is causing great concern among Chinese companies, while other issues such as currency exchange restrictions were causing problems with coal imports at Chinese power plants in Hub, Sahiwal, and Port Qasim.