ISLAMABAD: Privatisation Minister Mohammadmian Soomro on Thursday asked the international and local banks operating in Pakistan to participate as lenders to successfully complete the sell-off transactions of Balloki and Haveli Bahadur power plants, which the government plans to complete by December.
Accompanied by Prime Minister’s Special Assistant Nadeem Babar, the privatisation minister held meetings at the State Bank of Pakistan in Karachi on Thursday with presidents and group chiefs of NBP, MCB, UBL, HBL, ABL, Habib Metropolitan, Bank Al-Habib, Bank Alfalah, Bank of Punjab, Meezan Bank and Faysal Bank besides the SBP deputy governor.
During the meetings, debt arrangements for the two RLNG-based power plants of National Power Parks Management Company Ltd (NPPMCL) were discussed. Members of Privatisation Board and financial advisory consortium were also in attendance.
As part of the privatisation process, the potential bidders will be required to refinance government of Pakistan and DFL funding as well as NPPMCL’s existing commercial debt through foreign and or local debt financing.
The heads of commercial banks were to raise the requisite long-term financing within the benchmark approved by National Electric Power Regulatory Authority, and also support potential bidders in obtaining no-objection certificates for continuation of working capital lines.
Speaking on the occasion, Soomro emphasised that it is critical to ensure that the potential bidders are able to secure sufficient rupee-denominated financing in order to successfully complete the transaction.
Therefore, participation of local banks is important to provide additional confidence to potential bidders for successfully closing the transaction.
He said that considering the importance of the privatisation of these power plants, the Privatisation Commission would appreciate the cooperation of commercial banks and lenders to facilitate a successful transaction within the envisaged timeline.
Both Soomro and Babar apprised that the government in its reform process plans to address the issues of circular debt but due to pandemic, it has stalled for some time.
It was also discussed during the meeting that negotiation with the older independent power producers are in progress to find ways to address cost of generation. The banks proposed that the government may consider the terms of tariff to encourage bank interest in the subject transaction.
Published in Dawn, July 24th, 2020
Dear visitor, the comments section is undergoing an overhaul and will return soon.