KARACHI: PakGen Limited, an Independent Power Producer (IPP) owned by Nishat Group which is one of the largest corporate group in the country has signed a revised agreement with Central Power Purchase Agency (Guarantee) Limited. The two sides agreed upon the removal of due interest payment and an increase in the shutdown period in the revised agreement.
The company has waived off interest on payment and in return would get payments based on First In First Out (FIFO) principle. While the shutdown period of the power generation complex on account of non-availability of fuel has been treated as other force majeure event under The Power Purchase Agreement (PPA) and terms of the PPA have been extended by 156 days, PakGen Limited said in a statement issued at the Pakistan Stock Exchange (PSX) today.
During the extended shutdown period, the company will issue energy purchase price invoice only and will not issue capacity purchase price invoices for these 156 days and accordingly Liquidated Damages amounting to Rs2.2billion imposed on the company shall be withdrawn by the CPPA, the statement said.
“It is good that companies with strong capital backing are ready to agree on terms that will encourage others also,” Khurram Schezad, CEO Alpha Beta Core said in a phone interview from Karachi. “It is beneficial for both sides to carry on business and get out of unproductive state.
The interest and adjustments in terms and conditions of the agreement hopefully will lead to resolving the issue soon,” he added.