The Board of the Hub Power Company Limited (Hubco), in the greater national interest, has initialled a Negotiated Settlement Agreement with regard to the accelerated expiry on October 1, 2024.
Hubco disclosed this development to the Pakistan Stock Exchange (PSX) through a notice on Thursday in accordance with Sections 96 and 131 of the Securities Act, 2015 and Rule 5.6.1. of the Rule Book of the PSX.
These agreements were initially scheduled to expire in March 2027, relating to Hubco’s 1292 MW power generation project located at Mouza Kund, Post office Gaddani, District Lasbella, Baluchistan.
This project achieved COD in 1996.
“We hereby inform you that upon the request of the Task Force constituted under the Prime Minister’s Office, The Hub Power Company Limited, in the greater national interest, has initialled a Negotiated Settlement Agreement with regard to the accelerated expiry on October 1, 2024 of its relevant agreements scheduled to expire in March 2027, relating to the Company’s 1292 MW power generation project located at Mouza Kund, Post office Gaddani, District Lasbella, Baluchistan. This project achieved COD in 1996,” read Hubco’s notice to the PSX.
The company said that under the terms of the agreement, the Government of Pakistan (GOP) and Central Power Purchasing Agency (CPPA-G) have agreed to settle Hubco’s outstanding receivables up till October 1, 2024.
The company’s board has agreed to the terms of the settlement and authorised the execution of a definitive agreement in respect thereof.
The company said it shall accordingly keep the PSX informed in respect of material developments in this regard, if any.
This development follows the intervention of a government task force constituted under the Prime Minister’s Office, aiming to address and expedite the resolution of longstanding issues of the Independent Power Producers (IPPs).
On Wednesday, Hubco called an emergency board meeting 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 was in response to the government’s move to prematurely terminate their agreements.
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.
