Lahore: Nishat Chunian Power Limited's Board of Directors approved significant amendments to its Power Purchase Agreement and Implementation Agreement in an emergent meeting on December 4, 2024. These changes, proposed by a task force led by the Prime Minister of Pakistan, aim to transition the existing tariff to a 'Hybrid Take and Pay' model.

The approved amendments, effective from November 1, 2024, include changes to the indexation mechanism of operation and maintenance (OandM) costs, and a rebasing of tariffs related to the cost of working capital and OandM. The Return on Equity tariff component will adopt a hybrid take and pay mode, while the insurance premium tariff is capped at 0.9% of the engineering, procurement, and construction (EPC) cost.

According to information available from the Pakistan Stock Exchange (PSX), the company will share profits until the fiscal year 2023, with adjustments against receivables from the Central Power Purchasing Agency (CPPA). The Government of Pakistan will unconditionally withdraw from arbitration under the Arbitration Submission Agreements, and the undertaking provided to the power purchaser will be returned.

Additionally, all outstanding receivables as of October 31, 2024, are to be paid within 90 days of the agreement's approval by the Cabinet, and there will be a waiver of delay payments until the same date. The London Court of International Arbitration clause in the Power Purchase Agreement will be replaced with arbitration seated in Islamabad under local laws.