Govt to buy out 11 IPPs to avoid Rs450b capacity payments
Top Story
April 28, 2021
ISLAMABAD: The federal cabinet Tuesday decided to buy out 11 IPPs based on furnace oil (FO) at discounted value of Rs150-200 billion to avert payments of their capacity charges of Rs450 billion that it is bound pay in remaining seven years of their contracts.
This is how the government can tackle the issue of capacity payment charges an important component of Circular Debt to some extent. The outstanding amount the government is to pay to all IPPs in the head of capacity payments for the current year stand at Rs900 billion which will increase to Rs1500 billion in 2023.
Govt to Buy Out 11 IPPs to Save Billions in Capacity Payments
The Federal Cabinet has decided to buy out eleven IPPs based on furnace oil (FO) at a discounted value of Rs. 150-200 billion, reported a national daily.
The decision came to light on Tuesday, and it was reportedly taken to eliminate the capacity charges payments of the IPPs that have amounted to Rs. 450 billion. This amount is payable in the remaining seven years of their contracts.
Capacity payments are an important contributor to the circular debt. They extinguish the need for these periodic payments and can facilitate the resolution of this issue to an extent.
Govt to buy out 11 IPPs to avoid Rs450 bn capacity payments
Top Story
April 28, 2021
ISLAMABAD: The federal cabinet Tuesday decided to buy out 11 IPPs based on furnace oil (FO) at discounted value of Rs150-200 billion to avert payments of their capacity charges of Rs450 billion that it is bound pay in remaining seven years of their contracts.
This is how the government can tackle the issue of capacity payment charges an important component of Circular Debt to some extent. The outstanding amount the government is to pay to all IPPs in the head of capacity payments for the current year stand at Rs900 billion which will increase to Rs1500 billion in 2023.
The government has started the process of increasing electricity tariffs to generate more than Rs1 trillion additional revenue for distribution companies. AFP/File
ISLAMABAD: The government has started the process of increasing electricity tariffs to generate more than Rs1 trillion additional revenue for distribution companies of ex-Wapda to meet their revenue requirements for the fiscal year 2020-21.
The increases are being sought on account of annual adjustments, indexations of distribution margins for FY2020-21 and some prior-year adjustments in line with agreements reached with international lending agencies.
As part of the process, the National Electric Power Regulatory Authority (Nepra) on Thursday conducted a public hearing on the tariff increase petitions of three major distribution companies (Discos) from Faisalabad, Lahore and Islamabad. The hearing on petitions of other Discos would follow over the next few weeks.
Pakistan: Govt starts process of raising power tariff to generate Rs1tr revenue – Voice Of Vienna voiceofvienna.org - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from voiceofvienna.org Daily Mail and Mail on Sunday newspapers.