Payments to eighteen Independent Power Producers (IPPs) with a combined capacity of 4,267 MW have been temporarily suspended by the Pakistani government. This action comes before talks to change the model of their power purchase agreements (PPAs) from “take-or-pay” to “take-and-pay.” Until the Competitive Trading Bilateral Contract Market (CTBCM) is completely operating in two years, the move is only meant to be temporary.
The impacted IPPs are the focus of a contract renegotiation; they were founded in accordance with the power generating strategies of 1994 and 2002. Although the government hasn’t given a formal explanation for the payment halt, insiders speculate that it has to do with paying Chinese IPPs unpaid balances in advance of Premier Li Qiang’s arrival and completing payments to five IPPs for contracts that were terminated prematurely. Insiders assert that the moratorium is just temporary,
