ISLAMABAD: The Private Power & Infrastructure Board has reportedly conceded to its Board headed by Minister for Power, and acknowledged Interim Agreement (IA) with four indigenous gas-fired Independent Power Producers (IPPs) to be converted to RLNG.
This was the crux of 114th Board meeting of the PPIB held after a gap of a few days. Some agenda items of the previous meeting were deferred due to PPIB management resistance, however pressure compelled them to hold another meeting, sources added.
An official statement says, “The Board authorized PPIB to acknowledge the ECC approved IA for supply of RLNG to four indigenous gas-based IPPs namely Halmore, Saif, Orient and Saphire.”
According to Power Division, due to non-availability of gas these projects were operating on costly HSD. The replacement of RLNG with HSD will cut the fuel price to almost half, thus reducing the tariff considerably.
These projects had approached Central Power Purchasing Agency Guaranteed (CPPA-G) to finalise the payment mechanism for which PPIB was approached for acknowledgement of interim agreement, said an official.
Sardar Awais Ahmad Khan Leghari Minister for Power while appreciating the Board members for their active participation in the meetings said that investors in the power sector are ‘feeling the friendly environment’ as their cases are being fast tracked due to frequent meetings.
Managing Director PPIB, Shah Jahan Mirza briefed the Board on various agenda items and activities being undertaken by PPIB for timely implementation of power generation projects under its portfolio.
He further briefed the meeting that in order to encourage indigenous and sustainable energy PPIB is handling seven projects with a total capacity of 5,600 MW.
Managing Director NTDC made a presentation on the analysis of Matiari-Lahore HVDC transmission line, the flow of power from IPPs based on Thar coal from south to north, and their financial impact.
The Board, in its previous meeting, did not approve conversion of four IPPs to RLNG for reasons that were not revealed. The projects were AEL Lalpir, AES Pak Gen. Fauji Kabirwala Saba Power.
When asked if the Board has cleared these projects for conversion to RLNG, the official said that conversion of power projects is not the domain of PPIB but the Ministry’s mandate to take such proposals before the ECC.
“This meeting was convened to consider some of the proposals which could not go through in the previous session of the PPIB Board,” he maintained. The Board has also granted extension to 150 MW coal-fired power plant of M/s Grange and approved two projects of 1,320 MW (660 MWx2) at Thar block VI by Oracle.
The official statement says that Chairman advised PPIB, NTDC and CPPA-G to sit together and make a thorough analysis based on the actual commercial operation dates of the Thar coal based IPPs so that any financial exposure of the government can be avoided.
The Board also granted approval to go-ahead with the procedure of executing coordination and indemnity agreement between government of Pakistan and government of Sindh. Under the procedure, working draft of the agreement will be circulated to the government of Sindh through Ministry of Energy (Power Division) and after it is finalized between the parties, shall also be finally vetted by Ministry of Law & Justice before execution. This is required for the projects based in Sindh, where the Sindh Government signs Land Lease Agreement (LLA) and Water Use Agreement (WUA) with the IPPs. The GoP is covering default under these agreements in the Implementation Agreement (IA). Minister advised to conclude the agreement within one month.
On the proposal of the Federal Minister for Power Division, the PPIB Board decided to hold its next meeting at Thar, Sindh in the second week of February 2018 in order to review the indigenous coal assets.
The Board members will also take stock of the projects already under different phases at Thar. It will also provide first-hand knowledge and facilitate the right decisions relating to the Thar coal projects.—MUSHTAQ GHUMMAN