Engagement with IPPs: CCoE directs PD to initiate separate case


ISLAMABAD: The Cabinet Committee on Energy (CCoE) has directed the Power Division to initiate separate case for engaging with remaining Independent Power Producers (IPPs), including those dealing with hydel power that did not sign the MoUs, official sources told Business Recorder.

On January 26, 2024, the CCoE was informed that the Power Division moved a summary titled Implementation of Master Agreements and PPA amendments with Wind Power Producers (WPPs) of May 25, 2023.

CCoE considered the summary and directed Power Division to chalk out a new strategy to continue engaging 14 WPPs to achieve objective of savings for consumers and cost reduction on August 7, 2023. In order to implement decision of the CCoE notified following committee to engage with 14 WPPs: (i) Manager Director – PPIB (Member/Convener); (ii) Chief Executive Officer, CPPA-G (Member); (iii) Joint Secretary (PF), Power Division (Member); (iv) Joint Secretary, Law & Justice Division (Member); and (v) representative of Finance Division (Member).

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The Power Division further noted that M/s Chiniot Power Limited, an IPP based on baggasse did not agree during earlier negotiations to convert its MoU into binding agreement during 2020-21.

M/s Chiniot power Limited approached CPPA-G and Power Division January 1, 2024 and indicated its intent to renegotiate and initiate meaningful discussions with CPPA-G to resolve its disputes. Earlier, Memoranda of Understanding were signed with 47 IPPs as a consequence of negotiations during 2020.

After series of negotiations, the then Implementation Committee succeeded to convert 46 MoUs into initialed agreements as a report for approval by CCoE out of which there were binding agreements were executed and payments were made after due approval by CCoE and ECC with 32 IPPs (20 thermal IPPs),7 Baggasse IPPs, 3 Wind Power Producers and 2 solar IPPs.

CCoE authorized Power Division to devise a new strategy to continue engaging with 14 wind power producers. Power Division suggested that the committee constituted for engaging with WPPs can also engage with M/s Chiniot Power Limited to evaluate the proposal by the company to resolve disputes and place its recommendations for CCoE consideration. The committee may recommend possible options while keeping the proposals non-discriminatory for other baggasse based IPPs after due negotiations.

Power Division requested the CCoE to authorize the Division to enhance the scope of existing committee to engage with baggasse based IPPs to resolve the disputes and place its recommendations for consideration of the CCoE.

During the ensuing discussion, it was observed that the scope of the negotiations should not be restricted to WPPs or baggasse based power plants only as per proposal in summary but remaining hydel and gas based IPPs may also be engaged. It was further observed that since the summary carried proposal for extending the scope to remaining baggasse based IPPs, therefore, a separate summary would be required for the purpose rather than adding the scope of hydel and other IPPs in the instant summary.

The forum agreed to it. After discussion the CCoE approved the proposal regarding continuing negotiations with IPPs with the direction to Power Division to initiate separate case for engaging with remaining IPPs, including those dealing with hydel power, which did not sign the MoUs.

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