NEPRA grants PPIB 10-year license for power auction administration

The National Power Regulatory Authority (NEPRA) has awarded a 10-year license to the Private Power & Infrastructure Board (PPIB) to serve as an independent auction administrator (IAA) within Pakistan's power sector.

This license empowers PPIB to implement a competitive market framework, known as the Competitive Trading Bilateral Contract Market (CTBCM). This system aims to procure electricity through transparent and efficient bidding processes.

PPIB's primary role will be to support state-run ex-Wapda distribution companies (XW-DISCOs) and Suppliers of Last Resort (SoLR) in meeting their capacity requirements by procuring new capacity and energy to fulfill their load demands.

Notably, the amendments to the Regulation of Generation, Transmission, and Distribution of Electric Power Act, 1997 (the "NEPRA Act"), were introduced by the legislature to establish a competitive electric power market in Pakistan. These changes included the introduction of new license categories and the facilitation of additional market participants and service providers.

Subsequently, NEPRA endorsed the high-level design and detailed design of the Competitive Trading Bilateral Contract Market (CTBCM) in determinations made on December 5, 2019, and November 12, 2020, respectively.

The detailed design of CTBCM envisions the establishment of a registered entity to act as an Independent Auction Administrator (IAA), which will facilitate XW-DISCOs/SoLR in meeting their capacity obligations through capacity and energy procurement.

In accordance with the comprehensive design of the competitive market, the Private Power & Infrastructure Board (PPIB) formally applied for registration as an IAA under Section 25A of the NEPRA Act on October 11, 2021, with the aim of facilitating the implementation of the competitive market/CTBCM.

NEPRA conducted a public consultation on March 05-06, 2022, to gather input from the general public, interested parties, and affected individuals.

Subsequently, on March 08, 2022, letters were sent to various stakeholders soliciting their opinions to aid NEPRA's deliberations.

Feedback was received from five stakeholders, and after a thorough examination of PPIB's application, stakeholder comments, and related documents, NEPRA made its decision.

PPIB, established in 1994, serves as a federal entity to facilitate private investments in the power sector on behalf of the Government of Pakistan.

In 2012, PPIB gained statutory status through the Private Power and Infrastructure Board Act 2012.. Subsequently, in November 2015, the government expanded PPIB's role to include the facilitation of public sector power and related infrastructure projects in the Independent Power Producer (IPP) mode, leading to amendments in the PPIB Act.