By Staff Reporter
ISLAMABAD: The government has approved the setting up of the Pakistan Energy Revolving Fund (PERF) to repay outstanding dues worth Rs300 billion to Chinese Independent Power Producers (IPPs), a day ahead of Prime Minister Shehbaz Sharif’s scheduled visit to Beijing.
Officials said a Technical Supplementary Grant of Rs50 billion for payment of an installment to Chinese IPPs has also been approved. PM Sharif previously also released an Rs50 billion stuck-up amount.
Non-payment of dues to Chinese IPPs during the previous Pakistan Taheek-e-Insaf government had virtually stopped progress on CPEC projects.
A senior official at the Power Division said a high-level working group was constituted by the Ministry of Planning, Development & Reforms to resolve pending matters related to CPEC’s IPPs.
At a meeting of the working group for the Prime Minister’s upcoming visit to China, the Power Division and Finance Division was directed to expedite the issue of delayed payments to Chinese IPPs before the
high-level meeting.
“The Finance Division and Power Division jointly convened a meeting with SINOSURE on 26th Oct 2022 wherein Sinosure emphasized early resolution of Revolving Account Agreement pending between CPPA and CPEC IPPs since 2017,” the official said.
Pakistan and China signed the CPEC Energy Project Cooperation Agreement for the development of power projects in 2014. The CPPA and IPPs also agreed on the terms of the Revolving Account Agreement (RAA) for CPEC Projects. In this regard, Power Division initiated a summary on 13th July 2018, however, due to various technical and financial constraints, RAA could not be implemented. Subsequently, another Summary was initiated by the Power Division in May this year,
but the ECC deferred the summary.
The CPEC authority and IPPs have been raising the issue of delays in the Revolving Account Agreement at various forums. Similar requests from CPEC IPPs were also communicated through the Foreign Ministry.
Subsequently, the Power Division was advised to initiate the opening of an assignment account under the title of “Pakistan Energy Revolving Fund (PERF)” till such time, matters pertaining to Revolving Account Agreement are resolved.
The Finance Division advised that the account may be operated by CPPA and allocation may be re-appropriated from existing budget allocation with a monthly limit of Rs4 billion on withdrawals from such account.
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