IPPs will have to pay heavy fines for breaking contracts, experts warn – Business & Economy

Power division officials say the government cannot unilaterally walk away from agreements based on sovereign guarantees with IPPs, as this could expose the government to heavy fines in arbitral tribunals, as in the Rekodic case.

Local English newspapers In view of the growing criticism of capacity payments by prominent exporters led by former minister Dr Gauhar Ijaz, the government may renegotiate the contracts only when IP Pease talk voluntarily. Under this scenario, there may be little relief for electricity consumers.

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The English daily reported that the Power Purchase Agreements of the IPPs installed under the Power Policies of 1994 and 2000 were amended during the PTI regime and the US dollar price was capped at Rs 148. However, the power plants installed under the 2015 Power Policy will burden power consumers for a long time in the form of higher capacity charges as they were offered a 17 percent return based on the US dollar index at the current dollar value. had gone

“If the ROE is further reduced by 10 per cent, WAPDA will face a major reduction in financing requirements which will make these projects commercially unviable,” he said.