RLNG plant investors assured of power reforms
ISLAMABAD: The government has assured potential investors who have shown interest in the two RLNG-based power plants that their concerns regarding power sector reforms — specifically future debt financing, timeline extension — would be fully addressed.
The privatisation of power plants of Haveli Bahadur Shah and Balloki, managed by the National Power Parks Management Company Ltd (NPPMCL), has attracted unprecedented interest and twelve out of the total 23 investors have been prequalified for bidding.
It is stated that the 12 potential investors are from South East Asia, Middle East, Europe, Japan and Pakistan.
Key issues relating to the privatisation of the two RLNG projects were discussed at a meeting convened by the Privatisation Commission on Thursday, which was also attended by the potential buyers via video link.
The issues discussed were related to independent power projects, tariff matters, reduction of circular debt, improved power efficiency, reduction in cost, raising financing and its cost and ongoing energy plan.
According to informed sources, recent developments in the power sector, particularly the issues of debt and equity, are disturbing the investors. These are affecting the valuation of assets and the interest of investors. The overall economic situation of the country has also led the potential investors to seek clarifications from the government on different matters.
Privatisation Minister Muhammad mian Soomro, who chaired the meeting, observed that “without addressing their concerns, we could not retain investors’ interest and appetite,” and assured investors that their remaining issues would be addressed in an amicable manner.
He stated that the privatisation of NPPMCL would not be affected by any perceived sectoral issues emanating from recent developments. Special Assistant to Prime Minister, Nadeem Baber and Minister of State for Power, Shehzad Qasim brief the investors about the government’s future policies and sector reforms.
The investors requested the Privatisation Commission for the extension in the timeline as the site visit couldn’t be undertaken due to Covid-19 and travel restrictions. They would need to negotiate with lending institutions to secure financing for the transaction which may take time in view of the present situation.
Published in Dawn, July 10th, 2020