ISLAMABAD: Federal Minister for Privatisation Mohammad Mian Soomro discussed the privatisation of Regasified Liquified Natural Gas (RLNG) power plants of Haveli Bahadur Shah and Balloki with representatives of JP Morgan.
A handout issued by Privatisation Commission states that senior representatives of JP Morgan including Global Corporate Bank Central and Eastern Europe Middle East and Africa (CEEMEA) MD Asif Raza along with Global Corporate Bank Middle East and North Africa (MENA) MD Imran Zaidi as well as Pakistan Chief Executive Officer (CEO) Amin Khawaja had called on Soomro while senior officials of the ministry also attended the meeting.
JP Morgan is one of the world’s largest investment banks and is advising the consortium of Qatar Investment Authority (QIA) which had showed keen interest for the privatisation of National Power Parks Management Company Limited (NPPMCL).
It may be mentioned here that the government has initiated the process of implementing economic reforms in the power sector as a part of the reform. The Ministry of Privatisation is pursuing the privatisation of state-owned entities (SOEs) to promote and enhance capital formation outside government budgets and to improve efficiency through competition, accountability, managerial autonomy and profit incentives.
The process of privatisation of the two RLNG plants had slowed down due to Covid-19 and was restarted after pandemic restrictions were relaxed, currently, the Ministry is pursuing debt-refinancing and recapitalisation for NPPMCL, with local banks.
The JP Morgan MDs expressed that their QIA consortium is a strong contender for investment in the said power plants and inquired about the current volume of circular debt, payment due to IPPs and the receivables of NPPMCL, which could have a strong bearing on potential investment in the sector.
Mian Soomro said that meetings regarding these issues are to be held with the Ministry of Energy and Finance Division, while local banks and Development Finance Institutions (DFIs) are mulling over providing a significant portion of debt for NPPMCL.
It was also briefed that the Ministry of Privatisation has resolved various key issues to make this transaction viable, including the approval of CCI for the inclusion of power plants in the privatisation list, ECNEC’s approval for project costing, transfer of land for NPPMCL from the Punjab government, approval of the COD tariff determination, amendments in the canal and drainage rules approved by the Punjab government, conversion of land use of both power plants approved by the local government, water usage agreements and also the draft of a scheme regarding the de-merger of NPPMCL into two separate companies prepared for submission to the SECP.
The federal minister said that owing to the positive response from investors, the transaction will hopefully be completed in the current fiscal year (FY22).
