Nepra shifts 59 IPPs to SOFR, adopts global standard

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has officially transitioned 59 Independent Power Producers (IPPs) with foreign financing from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR).

Of these, 14 opted for Daily SOFR, while 45 chose Term SOFR. This move comes in response to LIBOR’s discontinuation on June 30, 2023, and is part of efforts to align Pakistan’s financial practices with global standards. The transition ensures that both legacy and new contracts now adhere to the more robust and reliable SOFR.

In addition, 14 other projects have adopted “daily simple SOFR”, calculated on an approved lookback period and the International Swaps and Derivatives Association (ISDA) recommended Credit Adjustment Spread (CAS).