No payment of Rs20bn to 14 WPPs unwilling to amend PPAs

ISLAMABAD: The incumbent caretaker government has discontinued ongoing negotiations with 14 Wind Power Plants (WPPs) as they are unwilling to amend their power purchasing agreements (PPAs), negating agreements they inked with the government of the day.

“The government will not pay Rs20.728 billion which was earlier earmarked for 14 WPPs but they didn’t show respect to the agreements they initialed for making way to amend their power purchase agreements. Since they have not altered the PPAs, the government will now reallocate Rs20.728 billion to clear outstanding liabilities of Government Power Plants (GPPs) and release the same as equity in DISCOs,” a senior official at the Energy Ministry told The News.

However, the government will deliberate on the possibility of initiating a fresh negotiation process with Wind IPPs with a new mandate to explore alternate options to ensure cost reduction of wind power generation. This issue will be taken up in the Cabinet Committee on Energy (CCOE), which is to meet on Friday (January 26).

Earlier, Memoranda of Understanding (MoUs) were signed with 47 IPPs as a consequence of negotiations during 2020. After a series of negotiations, the then Implementation Committee succeeded in converting 46 MoUs into initialed agreements as a report for approval by CCOE.

Out of these 46 IPPs, binding agreements with 32 IPPs (20 Thermal IPPs, 7 Bagasse IPPs, 3 Wind Power Producers (WPPs), and 2 Solar IPPs were executed and payments were made after due approval by CCoE and ECC.