Cabinet Committee on Energy (CCOE) on Monday deferred approval of the Indicative Generation Capacity Expansion Plan (IGCEP) considering the views of the governments of Khyber Pakhtunkhwa (KP) and Punjab which suggest that the approval will negatively impact Pakistan’s relations with China, according to a report published in Express Tribune.
The IGCEP policy approval is a pre-condition for the release of the $400 million loan tranche that the World Bank approved in June but stopped its disbursement.
The IGCEP has assumed that the Re-gasified Liquefied Natural Gas (RLNG) and imported coal-based power plants will be given a minimum dispatch as per their contractual obligations till the expiry of their contracts.
The sources said that the Punjab government is of the view that the policies are against the framework agreement of CPEC and could potentially harm Pakistan and China’s relationship. The main objection was to the policy of not buying electricity from RLNG and coal-fired power plants and instead of paying them capacity charges.
According to the report, KP government has also also claimed that by signing the approval for IGCEP, Pakistan’s economic growth rate would stagnate at 4 per cent to 5 per cent.
