Chinese IPP serves notice of payment default on CPPA

Port Qasim Electric Power Company Ltd (PQEPC), which runs a $1.9 billion power plant of 1,320 megawatts on imported coal, has served a formal notice of payment default on the Central Power Purchasing Agency (CPPA). The total verified due amount that the state-backed, sole electricity purchaser owes the independent power producer (IPP) amounted to Rs77.3bn or $263.5 million as of May 15, according to PQEPC CEO Guo Guangling. Owned by China’s Sinohydro Resources Ltd and Qatar’s Al Mirqab Capital Ltd, the IPP was part of the early-harvest phase of the China-Pakistan Economic Corridor (CPEC). Its power purchase agreement states that a failure to pay an undisputed amount by the CPPA within 35 days of the notice will constitute the power purchaser event of default. The IPP has demanded that the power purchaser must make a principal payment of $73.6m before May 31 to avoid a “facility agreement default” as well as a Government of Pakistan or “GoP default”.