Engro Powergen Qadirpur has entered into an Amendment Agreement with the Government of Pakistan and the Central Power Purchasing Agency (CPPAG) to adopt a Hybrid Take-and-Pay Model, effective retroactively from November 1, 2024, according to a filing at the Pakistan Stock Exchange (PSX). Â
The agreement introduces key revisions to the Power Purchase Agreement (PPA), ensuring a more flexible framework for the company’s energy dispatch and financial settlements.
Under the revised terms, the Company will be entitled to 35% of the Return on Equity (ROE) and Return on Equity During Construction (ROEDC) components as part of the capacity payment, calculated as per the terms of the PPA. If the net electrical output dispatched and delivered exceeds 35%, the company will be entitled to claim the differential accordingly.
Engro Powergen Qadirpur has waived and abandoned all claims related to late payment interest as of October 21, 2024. In turn, the government has agreed to facilitate a back-to-back waiver of late payment interest with Sui Northern Gas Pipelines Limited (SNGPL), and in the event of failure, CPPAG shall pay the company only the late payment interest amount recoverable by the company from SNGPL.
The agreement also includes a financial settlement, with CPPAG set to pay Rs8.04 billion within 90 days to clear outstanding receivables up to November 1, 2024. Furthermore, all previous claims under the Arbitration Settlement Agreement signed in June 2022 are considered resolved.
