Kot Addu Power Company Limited (KAPCO) has issued a statement addressing recent media reports suggesting that its power plant has been receiving payments without generating electricity. The company has categorically denied these claims, providing a detailed explanation to set the record straight.
KAPCO said in its notice to the PSX on Wednesday that the Company entered into a suite of agreements including the Power Purchase Agreement (PPA) in June 1996 at the time of its privatization by the Privatization Commission.
The term of the PPA was for twenty-five years, which was set to expire in June 2021. Pursuant to the terms of the third amendment to the PPA and Master Agreement, the end date for the term of the PPA was extended by 485 days (approximately 16 months) till October 24, 2022. This extension was agreed upon as the company was required to keep its power plant available for generation during this period.
“Since the expiry of the PPA on October 24, 2022, due to the absence of an operating regime, the Company’s power plant is in preservation mode. The company’s tariff application is pending final determination before the National Electric Power Regulatory Authority (NEPRA),” KAPCO said in its notice.
KAPCO highlighted that its facility includes a unique feature of 220KV-132KV switchyard and this facility is being provided to the Power Purchaser on special request from the ministry without any compensation from the date of expiry of the PPA, in the best interest of the consumers of MEPCO Region and smooth functioning of overall National Grid operations.
The company clarified that no capacity payments have been made by the Power Purchaser since the expiration of the PPA. However, KAPCO has received payments for overdue receivables relating to the period up to the end of the PPA on October 24, 2022, which have been duly reported in the company’s financial statements.
KAPCO has urged stakeholders to disregard any misleading reports and reiterated its commitment to transparency and compliance with regulatory requirements.
