Volume 11, Issue: 3, November 2019 APRIL 2017 INDEPENDENT POWER PRODUCERS ASSOCIATION MONTHLY NEWSLETTER Welcome to the thirty second edition of Independent Power Producers Association (IPPA) Newsletter. The newsletter is published on a monthly basis to ensure regular dissemination of information to Member IPPs and other stakeholders, and also to provide a platform to discuss issues pertinent to the energy sector of Pakistan. We would like you to send us your feedback and comments on how to improve the monthly newsletter. Monthly Infographics Outstanding Dues as of 15th October, 2019 in PKR Millions Outstanding Dues Comparison (15th September-15th October) Grand Total Others Overdue CPP Overdue EPP Overdue - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 EPP Overdue CPP Overdue Others Overdue Grand Total October 96,386 112,138 77,063 285,587 September 96,537 118,378 77,088 292,004 Source: Member and Subsidiary IPPs Monthly Infographics Billing and Payments in October 2019 in PKR Millions Billing & Payments 30,000 27,475 25,000 20,000 18,750 18,981 15,000 9,513 10,000 7,892 7,075 5,000 1,576 1,650 - EPP CPP Others Total Billing Payments Source: Member and Subsidiary IPPs Net Generation and Plant Utilization in October, 2019 Source: Member and Subsidiary IPPs Local News Circular Debt projected to touch Giving a timeline for the privatization of the Rs1.7 Trillion loss-incurring power sector, Babar said the entities could not be privatized for another two years, the key reasons being the weak writ of the ISLAMABAD: Special Assistant to the Prime government, large territorial jurisdictions of Minister on Petroleum and Chairman of the some power distribution companies and Energy Task Force gave a briefing on the uniformed tariff systems under which good and government’s power sector privatization policy bad discos were treated equally. He said the at a meeting of the National Assembly’s actual privatization of power distribution could Standing Committee on Privatization chaired by only begin by December 2021, adding that the PPP’s Syed Mustafa Mahmud. According to his Economic Coordination Committee (ECC) viewpoint, the power distribution companies wanted only a few distribution companies to be cannot be privatized for two years and the offered for sale before December 2021 and, for circular debt would soar to Rs1.7 trillion by the that reason, the Lahore Electric Supply time the government is able to arrest its growth. Company (LESCO) and the Islamabad Electric The top prime ministerial aide further added that Supply Company (IESCO) had been put on the the circular debt that had amounted to Rs1.28 privatization list. trillion in August 2018 will upsurge to Rs1.7 trillion by December next year at which point, Source: The Express Tribune /28-11-2019 he said, it would halt intensifying. His statement suggests that the circular debt would cultivate 41% during the first nearly two and a half years NJHPP may default if PPA not of PTI’s rule. Babar once again claimed that signed by CPPA-G compared to the previous monthly addition in the circular debt of Rs38 billion, the increase ISLAMABAD: The Neelum Jhelum had decelerated to under Rs10 billion a month, a Hydropower Company (NJHPP) is expected to claim disputed by the World Bank and the IMF go into default after December because of the during recent talks. He further said that the dilly-dallying approach of Central Power projected Rs1.7 trillion circular debts was then Purchasing Agency Guarantee (CPPA-G) in planned to be retired by booking part of it as signing power purchase agreement with NJHPP. public debt, settling a part of it against The NJHPP is Rs. 500 Billion investment privatization proceeds and by improving project of Government of Pakistan with the systemic efficiency. fundamental objectives of providing sustainable long-life cheap energy to the national grid. The Moreover, he confidently urged that the circular Prime Minister of Pakistan in April-2018 debt growth would be cut to zero by December ceremoniously inaugurated the project. Since 2020 and, if the distribution companies were to then NJHPP has injected over 6160 million units be privatized before that, the government would to the national grid. To save NJHPP from have to give heavy discounts to buyers. succumbing to financial starvation, sources said Furthermore, he was of the view that before NEPRA had given an interim power tariff of Rs August 2018, the unpaid power subsidies stood 5.9180 per unit of electricity. Also, while at Rs825 billion, Babar said, adding that the considering the tariff below the financial previous government had announced the requirements, NJHPP went in to the tariff review subsidies, including the Industrial Support request by NEPRA which was also approved Package, but had never budgeted the amount. and now NJHPP has a duly notified tariff of Rs 9.1184 per unit of electricity in vogue for the companies include ACT2 Wind Private Limited electric supply made since July 4th, 2018. 50MW, Artistic Wind Power Private Limited According to sources, a staff level agreement 50MW, Din Energy Limited 50MW, Gul had reached between the top tier management of Ahmed Electric Limited 50MW, Indus Wind Central Power Purchasing Agency Guarantee Energy Limited 50MW, Lake Side Energy (CPPA-G) and NJHPP this year in July 2019 yet Private Limited 50MW, Liberty Wind Power-1 CPPA-A is not signing Power Purchase Private Limited 50MW, Liberty Wind Power-2 Agreement with NJHPP. Moreover, till to date Limited 50MW, Master Green Energy Limited estimated loss to the government from this 50MW, Metro Wind Power Limited 60MW, and unreasonable move of CPPA-G amounts to Rs NASDA Green Energy Private Limited 50MW, 56 billion. The amount has been potentially Tri-Com Wind Power Private Limited 50MW. recovered from consumers by Discos, but Source: Business Recorder/26-11-2019 critically adjusted in circular debt to show efficiency and performance instead of payment to NJHPP. K-Electric, Engro Energy sign MoU Source: Business Recorder/27-11-2019 to set up Karachi’s first Waste-to- Energy Plant 12 Wind Power Projects worth $1 KARACHI: With profound concern and vision billion being set up in Sindh aimed at reducing the climate change impact by converting Karachi's municipal solid waste into KARACHI: With an estimated accumulative indigenous and renewable resource of energy, cost of around $1 Billion, 12 wind power K-Electric and Engro Energy signed a projects of total capacity 610 megawatts memorandum of understanding (MoU) to electricity are being set up at the Wind Corridor advance a 50MW Solid Waste to Energy Plant at of Sindh. The Energy Minister of Sindh, Imtiaz an estimated cost of $175 million. Moonis Alvi, Ahmad Shaikh said these environment-friendly CEO, KE and Ahsan Zafar Syed and CEO, projects are being set up with Public-Private Engro Energy MoU at KE’s head office formally Partnership, as the mandatory prerequisites, signed the MoU and shared mutual viewpoints including acquisition of Letter of Interests, relevant to the project. Through the project, Environmental Impact Study, land clearance, Karachi's municipal solid waste will be abridged land lease and feasibility approval have been by 3,000 tons per day to generate electricity, done. Moreover, he said the companies which will play a key role in addressing the concerned have fulfilled all the conditions of the municipality's waste issue and simultaneously Financial Close to get loans from banks to contribute in meeting the city's mounting power originate work on these projects. Meanwhile, an needs. According to Moonis Alvi, CEO KE said, insider at Sindh Energy department said that the “KE is committed towards providing clean, federal government has recently issued NOC to reliable and affordable energy for the sustainable the provincial government to set up these 12 development of the city. Signing of this MoU projects at the Jhimpir Wind Corridor. However, today is yet another testament of our efforts the minister said the provincial government had towards a cleaner and greener Karachi. sought NOC from the federal government to set We are hopeful to complete this project as soon up around 35 solar and wind power projects, to as possible with the right facilitation from all be set up across the Sindh long ago. The concerned quarters and regulatory approvals. As per reports, Karachi produces around 12,000 to number of new projects were under 15,000 tons of solid waste daily and therefore consideration. has the potential to generate more than 200MW Source: The Express Tribune/22-11-2019 of electricity. Successful commissioning of this project will encourage development of more such projects in the future to address the NEPRA notifies Rs. 1.83 per unit pressing waste disposal issues while also increase in Electricity Tariff resolving the problems of limited landfill spaces and gas emissions.” Ahsan Zafar Syed, CEO of ISLAMABAD: The National Electric Power Engro Energy also spoke and said, “Engro is Regulatory Authority (NEPRA) notified an always at the forefront of solving the pressing Rs1.83 per unit increase in electricity tariff issues of our time and one such challenge that under monthly fuel price adjustment for our country faces is waste management in our electricity consumed in September to generate Cities. This collaboration with Karachi Electric Rs24 billion revenue to ex-Wapda distribution signals our resolve to find a solution around the companies (Discos). The additional fuel cost waste management issues of one of Pakistan's will be charged to consumers in the coming major cities”. billing month of December. Moreover, the Source: Business Recorder/26-11-2019 upsurge is not applicable to K-Electric and lifeline consumers using less than 50 units of other Discos.