The Board of Directors of Nishat Chunian Power Limited (PSX: NCPL) in their emergent meeting held on December 04, 2024, (Wednesday) approved the amendments to the Power Purchase Agreement, Implementation Agreement.
The board also agreed to revise the tariff as proposed by the Task Force constituted by the Prime Minister of Pakistan to convert the existing tariff to a ‘Hybrid Take and Pay’ model.
The Board approved to execute Amendment Agreement with the Government of the Islamic Republic of Pakistan (GOP) and the Central Power Purchasing Agency (Guarantee) Limited (CPPA) to implement the proposed amendments.
Some salient terms and conditions are as under:
- The Amendment Agreement shall be effective from November 01, 2024;
- The indexation mechanism of O&M has been changed;
- Tariff of Cost of working capital and O&M has been rebased;
- The return on Equity tariff component will be paid in a hybrid take and pay mode.;
- Insurance premium tariff is capped at 0.9% of EPC Cost;
- The Company will Share profits till FY’23 and it will be adjusted, against receivables from CPPA;
- GOP will unconditionally withdraw Arbitration under Arbitration Submission Agreements;
- The undertaking provided to the Power Purchaser by the Company to retain its receivables till the conclusion of Arbitration under ASA shall be returned;
- Payment of outstanding receivables as of October 31, 2024, within in 90 days of approval of the Agreement by the Cabinet;
- Waiver of Delay Payments till Oct 31, 2024; and
LCIA Arbitration clause in PPA will be substituted with Islamabad seated Arbitration under the local laws.
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