Pay Rs161bln instantly to IPPs: ECC

ISLAMABAD: The government has decided to pay outstanding amount of Rs403 billion to 46 independent power producers (IPPs) and Rs161 billion will be released instantly, sources said on Monday.

The sources said the payment of Rs403 billion will be made in two instalments. First instalment will be 40 percent of the payable and will be paid one-third each in five-year sukuk and 10-year Pakistan Investment Bonds, while remaining 60 percent will be cleared within six months of the first instalment via the similar means.

Release of the payments will help ease pressure on companies and reduce circular debt. The Economic Coordination Committee (ECC) of the cabinet took the decision during a meeting chaired by Minister for Finance and Revenue Hafeez Shaikh.

Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Energy Omar Ayub Khan, Adviser to the Prime Minister on Institutional Reforms and Austerity Ishrat Hussain, Special Assistant to the Prime Minister on Revenue Waqar Masood, Special Assistant to the Prime Minister on Power Tabish Gauhar, State Bank of Pakistan Governor Reza Baqir, FBR and Board of Investment chairmen participated in the meeting. Ministry of Energy Secretary briefed the ECC about the detailed report by the implementation committee regarding conversion of memorandum of understandings into agreements with IPPs to devise a payment mechanism for clearing outstanding payables.

The implementation committee has agreed the payment mechanism with the 46 IPPs to clear the outstanding dues as on 30 November, 2020.

The ECC commended the efforts made by the implementation committee and acknowledged the input of all concerned including federal minister for energy, Special Assistant the Prime Minister on Power, Finance Division, Federal Land Commission Chairman, and Governor SBP in working out a viable payment mechanism with the IPPs which will eventually save approximately Rs836 billion for the government over the average life of the projects.

The ECC approved the report of the Implementation Committee with a direction to present the same before cabinet for final approval. The Federal Board of Revenue (FBR) presented a summary regarding procurement of video analytics surveillance system for proper monitoring of the production and sale of sugar in compliance with the directive of the Prime Minister.

The ECC approved an allocation of Rs350 million as a technical supplementary grant for installation of the most optimal video analytics surveillance system at the sugar mills’ premises during the current crushing season as requested by the FBR.