Government Allocates Rs200 Billion to Power Companies, Anticipates Lucrative Dividends
Karobar
In a groundbreaking move to address the persistent circular debt crisis within the energy sector, the government has swiftly allocated a substantial sum of approximately Rs200 billion among power companies, according to credible sources.
Out of this considerable amount, Rs140 billion has been disbursed to Generation Companies (GENCOs), while Rs57 billion has been directed to K-Electric.
This development gains significance as it aligns with the mandate set by the International Monetary Fund (IMF), specifying that the recipient companies must undergo a cash settlement. Consequently, there is a strong likelihood that these entities will distribute substantial dividends to their shareholders.
The primary objective of this initiative is not only to alleviate the mounting burden of circular debt in the power sector but also to partially resolve the gas circular debt through Government Owned Power Plants (GPPs) payments to major Petroleum sector entities, especially petroleum and Sui companies.
Recently, the Economic Coordination Committee (ECC) has given its approval to the Power Division's summary for settling payables to Government Owned Power Plants (GPPs) at par with Independent Power Producers (IPPs). The ECC has directed the release of Rs262.075 billion to public sector power plants through a technical supplementary grant.
Effectively executing this plan necessitates the approval of a Technical Supplementary Grant amounting to Rs262 billion in Investment Head A014 under the Power Division's demand for investment in Distribution Companies (DISCOs).
Simultaneously, an agreement has been reached to disburse Rs131.035 billion in the 2nd quarter, with the remainder scheduled for release in the subsequent quarters of FY24.
This allocated sum for the 2nd quarter includes a payment of Rs131 billion to GPPs, with Rs26.78 billion designated for GENCO-II, Rs2.965 billion for GENCO-III, Rs83.63 billion for WAPDA, Rs16 billion for Quaid-e-Azam Thermal Power (RLNG), and Rs1.635 billion for Quaid-e-Azam Solar Power.
It is worth noting that earlier media reports revealed the Finance Division's request for comprehensive expenditure details concerning the Rs601 billion allocated to the Power Division, specifically for settling obligations of Independent Power Producers (IPPs) and GPPs.
