Govt pays $28.8m to avoid default on Guddu power plant's loan instalment

To avoid default on a loan instalment of Guddu thermal power plant (747MW), the government has made a payment of $28.8 million to M/s HSBC, London under facility agreement.

On January 19, the Central Power Generation Company Limited (Genco-II), the operator of the Guddu power plant 747MW, has asked the concerned bank for the clearance of the loan instalment of $28.8 million and warned that the company will not be responsible for any repercussions arising out of delay of subject payment and all responsibility of such consequences of delay will be upon the concerned bank, official source told The Nation.

A letter written by chief executive officer of Genco-II to the National Bank of Pakistan (NBP) said, 'With reference to all above letters and your latest dated 19th January,2023 regarding the payment, wherein your bank shown inability to rout the payment without provision of the subject USD to NBP on the settlement date.' It is pertinent to mention here that State Bank of Pakistan (SBP) already issued permission on 17th January, 2023 to remit the $28,803,039.87 of 21st interest of $3,034, 881.91 and 15th repayment instalment $25,768,157.96 to M/s HSBC, London under facility agreement regarding 747MW, CCPP, Guddu.

As per mutual understanding, NBP is responsible to make above mentioned foreign loan payment, and previous instalments were also cleared under same understanding and relationship, said the letter.

It is worth to mention here that in 2009,Pakistan Electric Power Company (PEPCO) and Harbin Power Engineering (HPE) entered into contract for the 747 MW Guddu Combined Cycle Project.

In the year 2011, the Central Power Generation Company Limited (CPGCL) also known as Genco -II signed export credit facility agreement with various banks. The project has two gas turbines of 243MW each, and one steam turbine unit of 261MW.