Private Power & Infrastructure Board (PPIB) is all set to grant extension in the Financial Closing date under the Tripartite Letter of Support (TLoS) of 7.08 MW Riali Hydropower Project for a period of 18 months.
Managing Director PPIB, Shah Jahan Mirza has recently apprised Projects Committee of the PPIB that 7.08 MW Riali-Il Hydropower Project is run of river project located on Ghori Nullah, in AJK.
He briefed that due to the non-availability of ECC approved Security Documents (IA and WUA) for small hydro power projects, three extensions of 12 month each on 7th Sept 2021, 29th December 2022 and 10th November 2023, respectively, were granted.
As per the Amendment # 3 (3rd Extension) of TLOS, the Project Company was required to sign the Project Agreements for which they approached SIFC for early processing of approval of Project Agreements from CCOE/ECC. Accordingly, summary was considered by the CCoE on July 5, 2024, and it concurred with the proposal. Now, the standard documents are under process for ECC approval through Ministry of Energy (Power Division).
As per the commitment of the company and present progress status of project, company will require 14 to 18 months to achieve its Commercial Operation after being provided with drafts of approved Security Agreements. It was highlighted that the company has already started civil construction work of the Project from its equity and 60-65% of overall work has been completed.
The Committee was apprised that the Project Company has requested exemption from the payment of TLoS extension fee stating the reason that the delays in the provision of project agreements were not in the Company’s purview. Although there is no such provision in PPIB Fee and Charges Amendment Rules 2022 which allow waiver of fee to this project.
Representative GoPunjab suggested that extension fee may be waived considering the fact that reason of delay is beyond control of the Project Company.
The Chair and MD PPIB were of the view that since applicable rules do not contain any provision under which fee waiver could be granted, therefore the matter may be referred to the Board for decision. The Committee recalled that PPIB Board, in order to rationalize PPIB Fee Rules, constituted a committee, which may hold its meeting and finalize its recommendations for consideration of PPIB Board at the earliest.
After deliberations, the Committee unanimously recommended to the PPIB Board to consider the request of the Project Company for approval of extension in the Financial Closing date under the Tripartite Letter of Support of 7.08 MW Riali Hydropower Project for a period of 18 months i.e. from April 13, 2024, to October 12, 2025, subject to the
followings:
- (i) extension will be granted on the basis of a Single Performance
Guarantee, in line with Clause 8.4 - (ii)(c) of the Power Policy 2015, as the reasons for delay in the achievement of Financial Closing were beyond the reasonable control of the Project Company
- (iii) the Project Company shall extend the validity of the Bank Guarantee three months beyond the allowed period of extension
Regarding the request of the Project Company for waiver to the LoS extension Fee applicable to it, the Board is apprised that there is no such provision in PPIB Fee and Charges Amendment Rules 2022.
