Planned terminations for the IPPs include the
following: KAPCO, Kohinoor Energy, Gul Ahmed Energy, Liberty Power, Tapal
Energy and Attock Gen Limited.
Phased-out retirement for the IPPs includes the
following: HUBCO Base, Lalpir Power, PakGen Power, Rousch Power, Fauji
Kabirwala, Habibulla Coastal, Japan Power, Saba Power and Southern Electric.
The
brokerage house is of the view that with many of these capacities
already expired/ non-operational due to their fuel/ generational
inefficiencies, authorities have focused on the low-hanging fruit by gradually
terminating/ phasing these IPPs out.
It's important to note that these IPPs were part of the
master-agreement amendments in 2020 as well, which led to a downward
negotiation of their ROE components.
Four of the six IPPs planned for immediate retirement have
their PPAs already expired, meaning they do not bill capacity payments to the
power purchaser.
Therefore, it is believed that this move will have minimal
impact on the power purchase costs currently billed towards the CPPA-G.
However, early retirement of IPPs with remaining tenures may
be settled with a payout of present value of capacity payments due for the
remaining tenures.
