National Power Parks Management Company (Private) Limited (NPPMCL), a government-owned independent power producer (IPP), has invited the State Bank of Pakistan (SBP) to approve the transfer of US$4.7 million to General Electric (GE) for… Maintenance work. Of power plants powered by liquefied natural gas (RLNG). According to media reports, the payment delay is due to Pakistan’s strict restrictions on foreign exchange. The delay, according to NPPMCL, threatens the operational reliability of two major power facilities in Punjab.
NPPMCL operates two combined cycle RLNG-based power plants: a 1,223 MW facility at Baloki, Kasur District, and a 1,230 MW facility at Haveli Bahadur Shah, Jhang District. These stations play an important role in meeting the demand for electricity in Pakistan, especially during periods of peak consumption.
To ensure smooth operation of the plants, NPPMCL relies on Long Term Service Agreements (LTSAs) with General Electric, a global leader in energy technology. These agreements, which were awarded after international competitive bidding, cover basic maintenance and technical services. However, with payment approval by SBP stalled, GE’s ability to meet its contractual obligations is under pressure.
According to NPPMCL CEO Akram Kamal, the power utility submitted the remittance request through United Bank Limited (UBL) on October 9, 2024. Despite processing all queries from the Foreign Exchange Operations Department, the SBP is yet to give final approval due to foreign currency. Lack. It is worth noting that the Finance Department has already issued a no-objection certificate for remittances, which will facilitate the allocation of foreign currencies.
The restrictions imposed by the SBP are part of broader efforts to manage Pakistan’s dwindling foreign exchange reserves, but in this case, these restrictions have serious operational ramifications. GE has raised concerns about the delay, warning that continued non-payment could jeopardize its support for the two plants.
Any outage at the Baloki and Haveli Bahadur Shah stations could exacerbate the country’s power supply challenges, potentially leading to electricity shortages. Pakistan’s power sector is already plagued by inefficiencies, financial constraints, and significant system losses, making uninterrupted operation of these plants crucial.
Moreover, the situation may erode trust between the government and international service providers such as GE, complicating future agreements and cooperation.
NPPMCL has urged SBP to expedite the approval process, focusing on the strategic importance of the plants to national energy security. The company stressed the need to take quick action to avoid operational disruptions and ensure that Pakistan’s electricity grid remains stable.