Energy Task Force seeks performance-based rewards for successful deals with power producers 

The National Task Force on Energy has sought performance-based financial rewards for its members and for officials of the Central Power Purchasing Agency-Guarantee (CPPA-G) following renegotiation of agreements with Independent Power Producers (IPPs) and government power plants, Business Recorder reported. 

The task force was formed by the prime minister to review and revise power purchase agreements and address circular debt. BR cited sources as saying that the team has requested that CPPA-G consider incentives for its staff in recognition of work carried out during the reform process.

The task force has outlined several achievements, including termination of contracts with six IPPs and renegotiation of tariffs with thermal, bagasse and wind projects. Estimated savings from revised agreements are projected at around Rs4,000 billion over the remaining life of the contracts.

The task force also cited settlement of arbitration cases with 12 thermal IPPs and recovery of over Rs30 billion in excess payments. It said future late payment interest has been reset at KIBOR plus 1% across the power and petroleum supply chain, while more than Rs400 billion in accumulated late-payment interest has been waived.

In addition, the government recently raised Rs1.225 trillion from commercial banks to address circular debt. The amount will be recovered from electricity consumers of distribution companies and K-Electric at Rs3.23 per kilowatt-hour over six years.

Sources said the task force maintains that its work has improved liquidity in the power sector and strengthened financial sustainability. It has recommended that CPPA-G consider appropriate financial incentives for employees involved in implementing the reforms.

The government has already announced awards for the power minister, the privatisation adviser and the secretary of the Power Division for their role in revising agreements with IPPs and government plants, which authorities say will generate significant long-term savings.

Financial rewards have also been approved for officials of Power Holding Limited (PHL) for converting high-cost loans into lower-rate borrowings.