Government approves Rs93bn for energy sector

LAHORE: The federal government on Wednesday approved financing worth Rs93 billion for the energy sector, at a meeting of the Economic Coordination Committee (ECC) presided over by Prime Minister Shahid Khaqan Abbasi, reported an english daily.

The financing is aimed at avoiding load-shedding and will mostly come through loans. It was decided in the meeting that Rs80 billion will be raised on behalf of  Power Holding Private Limited (PHPL) through term finance certificates and Rs13.13 billion will be issued as a sovereign guarantee for evacuation of full electricity from 1320MW coal-based power plant at Hub.

Out of the total loan amount of Rs80 billion, only Rs55 billion is expected to be channeled towards power and oil sector, while the rest will go towards debt servicing and interest payments.

Independent Power Producers (IPPs) are currently facing financing challenges. Therefore around Rs35-Rs40 billion will flow towards IPP’s to ensure uninterrupted power production through them in the coming summer. The remaining Rs15-Rs20 billion will be given to Pakistan State Oil (PSO) and gas companies.

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“The approved plan to settle power sector payables will ensure that government-owned companies including PSO, SSGPL, SNGPL, Gencos, Discos and nuclear power plants continue to operate normally,” said an official statement.

The meeting also approved the procurement of 6.1 million tonnes of wheat for 2017-18 and discussed matters related to the sugar industry. A payment of Rs500 million to two oil marketing companies-PSO and Shell Pakistan- was also approved.

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