Saif Power Limited (SPWL), a prominent independent power producer (IPP), announced that its Board of Directors has approved amendments to agreements concluded with the government. This disclosure, made in a filing with the Pakistan Stock Exchange, is part of the company’s alignment with the ongoing reforms in the energy sector.
The revisions include major changes to the Power Purchase Agreement (PPA), Implementation Agreement (IA) and tariffs, following the recommendations of a task force established by the Prime Minister.
These changes are aimed at shifting the SPWL tariff structure to a “hybrid take-pay” model, which is being implemented in collaboration with the Government of Pakistan and the Central Power Procurement Agency (Guarantee) Limited (CPPA-G).
The agreements, which take effect retroactively from November 1, 2024, include amendments to the indexing mechanism for O&M costs, revisions to working capital and O&M definitions, and capping insurance premiums at 0.9% of the EPC cost. The government will settle outstanding dues from October 31, 2024, within 90 days of Cabinet approval, waiving late payment interest until that date. The arbitration mechanism has also been transferred to Islamabad under local laws, replacing the previous arrangement with the London Court of International Arbitration.
These amendments form part of a broader strategy pursued by the government to address deficiencies in the energy sector, reduce financial pressures, and improve the financial sustainability of energy producers. SPWL, which operates a 225 MW combined cycle power plant, is one of several independent energy companies taking part in the renegotiation. Recent developments in this sector include revised agreements entered into by Nishat Chunian Power Limited and Rosch (Pakistan) Power Limited, along with settlement discussions initiated by Hub Power Company Limited.