Govt selects Pak currency over dollar to pay IPPs as per initial agreement

A preliminary agreement has been reached between the government and the Independent Power Producer IPPs and IPPs have informed the Pakistan Stock Exchange PSX about it, reported 24NewsHD TV channel quoting it's on Monday.

Around two dozen IPPs, including Hubco, have signed a preliminary agreement with the government on Amended Power Purchase Agreements according to which the government will pay Rs 450 billion to IPPs.

Hubco submitted details of the agreement with Central Power Purchasing Company CPPC to Pakistan Stock Exchange.

Sources claimed that the Ministry of Finance will pay 40 percent of the amount immediately while the remaining 60 percent will be paid in the next fiscal year.

As per the agreement, the government will reduce the late payment surcharge and all payment will be provided to IPPs in Pakistani rupees currency instead of dollars, sources said. However, the final approval of the agreement will be sought from the federal cabinet and committee set up on IPPs.

It is pertinent to note that process towards signing the agreements by IPPs that earlier signed MoUs in August 2020 has begun as the government negotiation team and IPPs have reached an agreement