Pakistan Urged to Negotiate Settlement with Star Hydro to Mitigate MIGA Guarantee Risks


The Attorney General’s Office has advised Pakistan’s Power Division and National Transmission and Despatch Company (NTDC) to engage in negotiations with M/s Star Hydro to resolve an arbitration award issue, reducing the risk of a Multilateral Investment Guarantee Agency (MIGA) guarantee being called upon.

Following discussions at the Prime Minister’s Office and recent communications from the World Bank, emphasizing the urgency of resolving the matter, Pakistan faces a potential liability under the MIGA-covered Government of Pakistan Guarantee (GoP Guarantee) for the Star Hydropower project.

The arbitration award, rendered in favor of Star Hydro, demands prompt payment from Pakistan within 21 days. Failure to comply could result in MIGA paying the Guarantee Holder, impacting Pakistan’s international obligations and investment climate.

MIGA has expressed readiness to assist Pakistan in reaching a negotiated settlement with Star Hydro to mitigate these risks.

Story by Mushtaq Ghumman

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