Deal made with IPPs on payment of dues of Rs45b

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The government and Independent Power Producers (IPPs) reached an agreement on Thursday on the payment schedule for their outstanding dues to the tune of Rs45 billion which would be cleared within the next one month enabling IPPs to withdraw their notices invoking sovereign guarantees.
The agreement was reached at a meeting between the officials of the Ministry of Water and Power, Pakistan Electric Power Company (PEPCO), Private Power and Infrastructure Board (PPIB) and representatives of IPP Advisor Council (IPPAC).
Chairman IPPAC Abdullah Yousaf said that 9 IPP have withdrawn their notices after an agreement was reached on the payment of the outstanding dues of Rs45 billion. He said under the agreement the daily advances for fuel purchase would be restored from today and stuck capacity payments of Rs8 billion by September 29. He said the remaining amount would be cleared by October 14. He thanked the Minister for Water and Power Syed Naveed Qamar for taking measures for the resolution of the issues. He said the payment would allow the IPPs to avoid default on account of their payment to banks. Nine IPPs including Atlas Power, Attock Gen, Halmore Power, Liberty Power Tech, Nishat Chunian, Nishat Power, Orient Power, Saif Power and Sapphire Electric Company had served notices on account of non-payment of their dues under sovereign guarantee on August 26.
A statement issued by the Ministry of Water and Power said that detailed deliberations were held under Minister for Water and Power, Syed Naveed Qamar, PPIB and representatives of IPPs to amicably resolve the issue so that these IPPs remained operational and were able to service their debts to the lenders before September 30 and avoid invoking the government guarantee in future.
After detailed discussion, it was agreed that the normal daily payments to 9 IPPs will be restored. IPPs will be paid total outstanding capacity payments to service their debt towards the lenders on or before September 29, 2011. The nine IPPs shall withdraw their notices to the power purchaser forthwith. Implementation and power purchase agreements with 9 IPPs under Power Policy 2002 will remain intact except for the aforementioned stipulations and the government on or before October 15, 2011, shall pay or procure the payment of all remaining amounts of the outstanding amount, less amounts paid until October 14, 2011.