Independent Power Producers (IPPs) are in severe liquidity crisis owing to the alarming level of circular debt and default by power purchasers.
Wapda and National Transmission and Despatch Company (NTDC) currently owe over Rs230 billion to the IPPs against the overdue invoices for electricity purchased and received on the national grid.
Talking to newsmen on Thursday, Hubco Chief Executive Khalid Mansoor said that Wapda’s payment default has resulted in severe effects on the financial viability of the power plants and affected the sustainability of the operations. IPPs are on the verge of collapse, despite engaging their entire working capital resources.
Contrary to the Power Purchase Agreement, Wapda has released a meager sum or in some cases absolutely no payments to IPPs over the past few months.
As per NTDC, IPPs are at least 40 per cent more efficient. At present, they contribute more than 50pc of Pakistan’s energy supply.
