Two Independent Power Producers (IPPs) listed on the Pakistan Stock Exchange (PSX) have called emergency board meetings in response to the government’s move to prematurely terminate their agreements.
The Hub Power Company Limited informed in a notice to the PSX on Thursday that its Board of Directors will meet on Thursday, October 10, 2024, to discuss the company’s Implementation Agreement, Power Purchase Agreement, Fuel Supply Agreement and the Guarantee which were scheduled to expire in March 2027.
“This is to inform you that an emergent meeting of the Board of Directors of the Company will be held on Thursday, October 10, 2024, at 10:30 a.m. at the Company’s Head Office, 9th Floor, Ocean Tower, Block-9, Main Clifton Road, Karachi to place before the Board, the terms proposed for the premature termination in October 2024, of the Company’s Implementation Agreement, Power Purchase Agreement, Fuel Supply Agreement and the Guarantee which were scheduled to expire in March 2027, in light of the discussions with the Task Force constituted under the Prime Minister’s Office and certain IPPs, including the Company,” read the Hubco’s notice.
Similarly, Lalpir Power Limited, a subsidiary of Nishat Group, issued a notice on Tuesday announcing an emergency board meeting to discuss the government’s proposal for the premature termination of its agreements.
These developments reflect growing uncertainty within the energy sector as the government seeks to renegotiate or cancel contracts with IPPs to address financial pressures and reform the power sector.
Earlier reports indicated that the government has already secured agreements for early termination with four IPPs, including Atlas Power, Saba Power, Rousch Power, and Lalpir Power, with HUBCO expected to follow soon.
The Task Force on Power Sector, which includes senior security officers, legal experts, and representatives from SECP, PPIB, CPPA-G, and Nepra, played a central role in these negotiations.
While several IPPs, including HUBCO, initially resisted the termination of their Power Purchase Agreements (PPAs), they eventually showed flexibility in the discussions. However, unresolved differences remain between HUBCO and the government over Rs1 billion in compensation.
