World News | Pak’s market operator seeks PKR 100 billion for payments to Chinese power producers

Islamabad [Pakistan]October 26 (ANI): Market operators in Pakistan’s power sector have reportedly sought Rs 10,000 crore revolving accounts for payments to Chinese Independent Power Producers (IPPs) under the Revolving Account Agreement (RAA) 5-6 months of payments, media reports quoted sources as saying.

A source from the Central Power Procurement Agency Guarantee (CPPA-G) told Business Recorder the request was made to the Chinese IPP. Notably, Chinese power producers have been frustrated by late payments last year.

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Sources told The Business Record that they had urged the Pakistani government to open a revolving account to address the issue of new investments in Pakistan that had been halted.

In this regard, the Chinese Ambassador to Pakistan and Chinese-funded enterprises have held talks with the Prime Minister, Minister of Finance, Minister of Electricity and other relevant departments on the payment issue, but the payment issue remains to be resolved.

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According to Article 5 of the China-Pakistan Economic Corridor (CPEC) Energy Project Cooperation Agreement, all direct or indirect costs incurred in maintaining the revolving account will be reimbursed by power producers through a mutually agreed discount arrangement, Business Recorder reported.

“The CPEC project/IPP has been approaching CPPA-G to resolve its payment issues as early as possible,” the source told the media portal.

According to CPPA-G estimates, the revolving account needs an estimated monthly funding of Rs 1,934.8 crore, the source said, adding that CPPA-G believes that the revolving account, which was originally proposed by the power sector at a deficit of Rs 5,000 crore, should be increased to Rs 1,000 crore. billion rupees.

“RAA is used to pay 22% of invoices raised by IPP, the guarantee of Rs 10,000 crore will cover the payment gap of 5-6 months in case IPP withdraw funds every month, which is very likely in the current situation, CPPA will not be able to replenish the account ,” the source said. (ANI)

(This is an unedited and auto-generated story from the Syndicated News feed, the body of the content may not have been modified or edited by LatestLY staff)