Saif Power Limited Approves Switch to Hybrid Take and Pay Model

The Board of Directors of Saif Power Limited (PSX: SPWL) has approved to revise tariff proposed by the Task Force constituted by the Prime Minister of Pakistan to convert the existing tariff to ‘Hybrid Take and Pay’. 

“The Board of Directors of the Company has discussed and approved the amendments to Power Purchase Agreement (PPA), Implementation Agreement and to revise tariff as proposed by the Task Force constituted by the Prime Minister of Pakistan to convert the existing tariff to ‘Hybrid Take and Pay’ to execute Amendment Agreement with the Government of Islamic Republic of Pakistan and the Central Power Purchasing Agency (Guarantee) Limited to implement the proposed amendments,” the company said in a notice to the Pakistan Stock Exchange (PSX) on Friday. 

Key terms and conditions of the agreement include: 

• Indexation mechanism of O&M has been changed;
• Tariff of cost of working capital and O&M have been revised;
• Return on Equity tariff component, will be paid in a hybrid take and pay mode;
• Insurance premium tariff is capped at 0.9 percent of EPC cost;
• GOP will unconditionally withdraw Arbitration under Arbitration submission Agreements;
• Payment of outstanding receivables as on Oct 31, 2024 within in 90 days of approval of the Agreement by the Cabinet;
• Waiver of late payment interest till Oct 31, 2024; and
• LCIA Arbitration clause in PPA will be substituted with Islamabad seated Arbitration under the local laws.

The amendment agreement would be effective from November 01, 2024;