Pepco abandons payment to nine IPPs – Alfalah Securities Limited

Karachi: The Pakistan Electric Power Company (Pepco) has abandoned payment of dues to nine Independent Power Plants (IPPs) on account of their decision over the issuance of sovereign guarantee notices to the Government of Pakistan for not resolving the circular debt issue.

According to Alfalah Securities Limited, these IPPs include Nishat Chunian Power, Nishat Power, Atlas Power, Attock Gen, Liberty Power Tech, Orient Power, Sapphire Electric Co, Halmore Power and Saif Power.

Pepco pays PKR 200 million to these IPPs on daily basis however; the power purchaser has abandoned payment of dues to these power plants since August 30, 2011 and the total amount outstanding has mounted up to PKR 2 billion for 10 days. The non-payment of dues have caused these IPPs to utilize their credit limits to full extent and are likely to default whereas, the banks have also refused to extend their credit lines and lend further as their exposure has already reached 30% of the total investment.