Engro Powergen Qadirpur Limited (PSX: EPQL) Monday announced that it has entered into an Amendment Agreement with the Government of Pakistan and Central Power Purchasing Agency (Guarantee) Limited (CPPAG).
In a notice to the Pakistan Stock Exchange (PSX), the company said that the decision has been taken in the “larger national interest”.
Under this agreement, the company will implement a Hybrid Take-and-Pay Model, effective retrospectively from November 1, 2024. As part of this model the following changes will be incorporated in the Power Purchase Agreement (PPA) along with other non-material changes:
The company will be entitled to 35 percent of the Return on Equity (ROE) and Return on Equity During Construction (ROEDC) components as part of the Capacity Payment, calculated as per the terms of the PPA. If the net electrical output dispatched and delivered exceeds 35 percent, the company will be entitled to claim the differential accordingly.
The company has waived and abandoned all claims related to late payment interest as of October 21, 2024. In turn, the GOP has agreed to facilitate a back-to-back waiver of late payment interest with Sui Northern Gas Pipelines Limited (SNGPL) and in the event of failure, CPPAG shall pay to the company only the late payment interest amount recoverable by the company from SNGPL.
CPPAG shall pay the company Rs. 8.04 billion as a settlement for receivables accumulated up to November 1, 2024 within 90 days.
Additionally, under the Arbitration Settlement Agreement executed in June 2022, all claims stand settled.
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