IPPs demanding overdue payments

IPPs demanding overdue payments

Independent Power Producers Association (IPPA) has asked for an immediate payment of the over dues by Power department. Many of the IPPs are on the verge of defaulting if the dues are not cleared on time.

The overdue position of 21 IPPs as of the end of February 2020 stood at Rs 331 billion of which Capacity Payment Price (CPP) was Rs 135 billion. Average period for which the CPP remained unpaid was 14 months. Late Payment Interest (LPI) and other overdue stood at Rs 86 billion.

According to the IPPs, the LPI ageing is very precarious and the oldest overdue invoice in this head is almost 8 years old.

When last tranche of Energy Sukuk of Rs 200 billion was released in March 1, 2019, majority of the money was paid under the head of Energy Purchase Price (EPP) and thereby immediately paid to the fuel suppliers, and IPPs were requested to build up the fuel stock due to escalating situation with India. IPPs agreed to this as discharge of their national duty and in the best interest of Pakistan.

At that time, IPPs were promised that the next tranche of Energy Sukuk of Rs 200 billion would be released very shortly and it would be allocated in Capacity Power Purchase (CPP) and LPI heads, however, to date that has not happened.