Islamabad: Fatima Energy Limited’s status change from a captive power plant to an independent power producer seems to be under scrutiny as the Prime Minister has issued instructions to the Ministry of Water and Power for conducting an investigation into this matter, as per a senior government official on Thursday.
Fatima Sugar Mills was initially instituted as a captive power plant which was responsible for provision of bulk energy supply to consumers and was setup as a special purpose vehicle (SPV) under the government’s co-generation policy. As per the government official, then Fatima Energy Limited applied to converts its status from a captive power plant to an IPP from the Private Power and Infrastructure Board (PPIB). It was supposed to be a 118.8 megawatt co-generation bagasse and imported coal based power plant. After successful conclusion of the registration process, Fatima Energy then sought a tariff petition approval from National Electric Power Regulatory Authority (NEPRA) which was also dually granted. The power regulatory authority then announced a tariff of Rs7.83 per unit on a take and pay basis.
This conversion from a captive power plant to an IPP is blatantly illegal as separate policies are in place to constitute their existence as per the government official. The tariffs for captive power plants tend to be higher than what other power producers offer and neither these plants are considered a part of or added to the national grid. Neither are they protected by any sort of government guarantees, the official added.
