ISLAMABAD: On Tuesday, Kot Addu Power Company Limited (KAPCO), one of Pakistan’s leading independent power producers (IPPs), announced that the National Electric Power Regulatory Authority (NEPRA) has approved the inclusion of its power plant in the Power Acquisition Plan (2023-2027) for distribution companies.
The company shared this development in a notice to the Pakistan Stock Exchange (PSX). KAPCO also revealed progress in its ongoing discussions with the National Task Force on Implementation of Structural Reforms (Power Sector) regarding the renewal of its Power Purchase Agreement (PPA).
“Due to system requirements, NEPRA has confirmed the inclusion of KAPCO’s power plant in the Power Acquisition Plan (2023-2027), meaning the plant will be required in the power system until 2027,” the notice stated.
The company further explained that it has reached a preliminary agreement to renew the PPA for 500 MW of power and a switchyard, with terms allowing for a three-year extension under a hybrid take-and-pay model. This model will cover certain fixed costs and provide a minimum guaranteed return, with additional returns linked to extra electricity generation.
KAPCO also highlighted that it has not received any capacity payments since the expiry of its previous PPA in October 2022.
After the review period, the government approved the continued operation of KAPCO’s power plant and instructed relevant authorities, including NEPRA, Central Power Purchasing Authority (Guarantee) Limited (CPPA-G), and the National Transmission and Dispatch Company Limited (NTDC), to complete necessary formalities for executing the renewed PPA.
As part of these developments, KAPCO has filed an addendum to its tariff petition with NEPRA for the determination of a final tariff. Once the company is formally notified of the renewal terms, it will seek the necessary corporate approvals.
KAPCO operates Pakistan’s largest combined-cycle power plant, which consists of 10 multi-fuel-fired gas turbines and five steam turbines.
