The National Power Parks Management Company (Private) Limited (NPPMCL), a government-owned Independent Power Producer (IPP), has called on the State Bank of Pakistan (SBP) to approve a $4.7 million remittance to General Electric (GE) for maintenance of its RLNG-fired power plants. According to media reports, the payment delay is attributed to Pakistan’s stringent foreign exchange restrictions. The delay, as per NPPMCL, threatens the operational reliability of two major power facilities in Punjab.
NPPMCL operates two combined cycle RLNG-based power plants: a 1,223 MW facility in Balloki, District Kasur, and a 1,230 MW facility in Haveli Bahadur Shah, District Jhang. These plants play a significant role in meeting Pakistan’s electricity demand, particularly during periods of peak consumption.
To ensure the plants run smoothly, NPPMCL relies on Long-Term Service Agreements (LTSAs) with GE, a global leader in energy technology. These agreements, awarded after international competitive bidding, cover essential maintenance and technical services. However, with payment approval stalled by SBP, GE’s ability to uphold its contractual obligations is under pressure.
According to NPPMCL CEO Akram Kamal, the power company submitted its remittance application through United Bank Limited (UBL) on October 9, 2024. Although all queries from the Foreign Exchange Operations Department were addressed, SBP has yet to grant final approval due to foreign currency shortages. Notably, the Finance Division has already issued a No Objection Certificate (NOC) for the remittance, which should facilitate the foreign exchange allocation.
The SBP’s restrictions are part of broader efforts to manage Pakistan’s dwindling foreign reserves, but in this instance, they are having serious operational repercussions. GE has raised concerns about the delay, warning that sustained non-payment could jeopardize its support for the two plants.
Any disruption at the Balloki and Haveli Bahadur Shah plants could exacerbate the country’s energy supply challenges, potentially leading to electricity shortages. Pakistan’s energy sector already grapples with inefficiencies, financial constraints, and high system losses, making uninterrupted operations at these plants critical.
Moreover, the situation may erode trust between the government and international service providers like GE, complicating future agreements and collaborations.
NPPMCL has urged SBP to expedite the approval process, emphasizing the plants’ strategic importance for national energy security. The company has stressed that swift action is required to avoid operational disruptions and ensure Pakistan’s electricity grid remains stable.