Karachi: Engro Powergen Qadirpur Limited (EPQL) has announced a significant development in its operations, having entered into an Amendment Agreement with the Government of Pakistan (GoP) and the Central Power Purchasing Agency (Guarantee) Limited (CPPAG), according to an official disclosure on October 21, 2024. This move is in line with Section 96 of the Securities Act, 2015, and Clause 5.6.1(a) of the Pakistan Stock Exchange (PSX) Regulations.

According to information available from the Pakistan Stock Exchange (PSX), the company will implement a Hybrid Take-and-Pay Model, effective retrospectively from November 1, 2024. This model introduces several key changes to the existing Power Purchase Agreement (PPA). Notably, EPQL will now receive 35% of the Return on Equity (ROE) and Return on Equity During Construction (ROEDC) components as part of the Capacity Payment, calculated in accordance with the terms of the PPA. Additionally, if the net electrical output dispatched and delivered exceeds 35%, EPQL will be entitled to claim the differential accordingly.

The agreement also sees EPQL waiving and abandoning all claims related to late payment interest as of October 21, 2024. In exchange, the GoP has agreed to facilitate a back-to-back waiver of late payment interest with Sui Northern Gas Pipelines Limited (SNGPL). Should this facilitation fail, CPPAG has committed to paying EPQL only the late payment interest amount that can be recovered from SNGPL.

Furthermore, CPPAG is set to pay EPQL PKR 8.04 billion as a settlement for receivables accumulated up to November 1, 2024. This payment is to be made within 90 days. The June 2022 Arbitration Settlement Agreement, which resolved all claims, remains intact under this new agreement.

EPQL has expressed its commitment to keeping the Exchange and its stakeholders informed of any further material developments regarding this agreement, ensuring transparency and compliance with the designated market category regulations.