The government has approved one year extension to the Financial closing date of Thar Coal Block-1 Power Generation Company, well informed sources told Business Recorder.
M/s Thar Coal Block-I Power Generation Company (Pvt,) Limited was issued a Letter of Support (LoS) on July 20, 2016 which was amended on September 15, 2017, January 12, 2018, August 17, 2018, February 22,2019, July 10, 2019, December 10, 2019, March 19, 2020, July 10, 2020, February 24, 2021 and August 24, 2021.
The Project Company, for which eleventh amendment has been approved, and entered into Implementation Agreement (IA) on December 12, 2019 with the President of Pakistan for and on behalf of Islamic Republic of Pakistan.
The project company entered into Power Purchase Agreement (PPA) on August 27, 2019 with Central Power Purchasing Agency (Guarantee) Limited. The Project Company requested for an extension in the Financial Closing Date up to December 31, 2022 as provided in the LoS.
The sources said, Competent Authority has approved twelve months extension to the Financial Closing Date up to December 31, 2022. The Project Company has extended validity of the Performance Guarantee of July 15, 2016 up to March 31, 2023 through its amendment of March 25, 2022.
Now, PPIB has amended LoS subject to following terms and conditions: (i) the Project Company shall achieve the Financial Closing on or before December 31, 2022 under and in accordance with the terms of the LoS; (ii) grant of extension up to extended financial closing shall not entitle the project Company to request or claim any extension of the Required Commercial Operations Date (RCOD) in future under the Implementation Agreement (IA) and the PPA merely on the basis of extension in the Financial Close Date; (iii) notwithstanding anything contained in the LoS, the IA or the PPA, the extension in the Financial Close Date up to extended financial close date as provided despite the RCOD being May 31, 2022 under the IA and the PPA shall be at the sole risk and cost of the Company and the Company shall be liable to pay liquidated damages under section 9.4A of the PPA; (iv) in case the Company delays, defaults or fails to achieve the Financial Closing by the extended financial closing date under and in accordance with the terms of the LoS, PPIB in addition to any other actions set out in the LoS and the project agreements, shall be entitled to en-cash the Performance Guarantee in full amount without any notice to or demand on the sponsors or the company in accordance with the terms of LoS and the Performance Guarantee; (v) no waiver by PPIB of any default by the sponsors or the Company in the performance of any of the provisions of the LoS shall operate or be construed as a waiver of any other or further default whether of a like or different character; (vi) failure by the PPIB to insist on any occasion upon the performance of the terms, conditions and provisions of the LoS or time or other indulgence granted by PPIB to the sponsors or the project company, shall not thereby act as a waiver of the breach, as acceptance of any variation, or as the relinquishment of any such right under the Performance Guarantee or the LoS;(vii) grant of Extended Financial Closing Date herein shall not prejudice the rights of PPIB as contained in the Performance Guarantee; (viii) this Amendment No.11 shall be treated, read and construed as an integral part of the LoS to which it shall be attached. The provisions of this Amendment No.11 shall supersede the provisions of the LoS only to the extent as contained and as amended herein; (ix) the Amendment No.11 shall be effective from January 1, 2022; and (x) all other terms and conditions of the LoS shall remain unchanged and shall continue to be in full force and effect.
