PQEPC warns of power plant shutdown as payment delays beyond six months

ISLAMABAD: Port Qasim Electric Power Company (Private) Limited (PQEPC) has sought approached Finance Minister, Senator Muhammad Aurangzeb for release of funds to Central Power Purchasing Agency-Guaranteed (CPPA-G) for onward payment to Chinese IPPs.
In a letter, Chief Executive Officer (CEO), Wang Dongfang, has stated that under the guidance of the Government of Pakistan, the 1320 MW Port Qasim Coal-fired Power Project, acting as a leading energy project under China-Pakistan Economic Corridor (CPEC), has continuously provided the cleanest, reliable and economical electricity to the national grid, and endeavored our efforts in controlling the Circular Debt throughout the outbreak of Covid-19 pandemic.
According to him, total payment due amount of the project has reached to Rs. 93.5 billion bn. i.e. $ 334 million by 26 February 2025, with a delay payment period of over 6 months and could further escalate.
In this case, the Project Shareholders/Sponsors from China and Qatar has disclosed significant discontent and request to immediately take all necessary measures to reduce the outstanding amount. CEO has further informed that current due amount entitles PQEPC to proceed to suspend the plant operation according to PPA Section 9.10 without any Liquidated Damages.
He has claimed that PQEPC has comparative advantages on the EPP tariff, compared with other oil and RLNG power plants. In this regard, project suspension will be a lose-lose situation that both sides should jointly make efforts to avoid. Therefore, timely settlement of due amount of the Project is imminently required to ensure the sustainable power generation and avoid constitution of Loan Agreement Default and GoP Sovereignty Guarantee Default.
After sharing the background, CEO PQEPC has requested the Finance Minister for coordination with relevant authorities to provide financial support to CPPA, enabling them to pay off the outstanding amount as early as possible.
The sources said, Finance Division has released about Rs 18 billion to CPPA-G on account of subsidies for Inter-Disco Tariff Differential for FY 2024-25, subsidy on account of Agri-tubewells in Balochistan, AJ&K and 23rd tranche of under Pakistan Energy Revolving Account meant for Chinese IPPs.
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