Lahore: In an emergent meeting held on December 4, 2024, Nishat Power Limited's Board of Directors approved several significant amendments to its Power Purchase Agreement and Implementation Agreement. These changes align with the recommendations of a task force constituted by the Prime Minister of Pakistan, aimed at transitioning the existing tariff structure to a 'Hybrid Take and Pay' model. The board also sanctioned the execution of an Amendment Agreement with the Government of the Islamic Republic of Pakistan and the Central Power Purchasing Agency (Guarantee) Limited.

The Amendment Agreement, effective from November 1, 2024, involves several key changes. These include modifications to the indexation mechanism of operations and maintenance (OandM) and a rebasing of the tariff for the cost of working capital. The Return on Equity tariff component will now be paid in a hybrid take and pay mode, and the insurance premium tariff is capped at 0.9 percent of the EPC cost. Furthermore, the company will share profits through fiscal year 2023, which will be adjusted against receivables from CPPA.

According to information available from the Pakistan Stock Exchange (PSX), the agreement stipulates that the Government of Pakistan will unconditionally withdraw from arbitration under Arbitration Submission Agreements. Additionally, it mandates the payment of outstanding receivables as of October 31, 2024, within 90 days of the Cabinet's approval of the Agreement. The waiver of delay payments until October 31, 2024, is also included, and the LCIA Arbitration clause in the Power Purchase Agreement will be replaced with arbitration seated in Islamabad under local laws.