ECC defers decision to pay IPPs under 2002 Power Policy

June 17, 2021

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As per the news reports, Economic Coordination Committee (ECC) has postponed a decision on payments to independent Power producers working under the 2002 Power Policy.

Sources said that on June 16, 2201, the Energy Division briefed the Committee on Electricity, sharing details that the Cabinet Committee on Energy (CCoE) and the ECC reviewed the Implementation Committee’s report and approved the IPP payment mechanism and agreements at its February 2021 meeting which was approved by the cabinet.

Briefly presented by the Energy Ministry on May 5, 2021, the ECC ruled and the Federal Cabinet approved the following ECC Decision of May 18, 2021: (1) Payments for all IPPs (in accordance with the energy policy up to 1994, 1994 and 2006) can be processed in accordance with signed agreements, with the exception of the IPP under the 2002 Energy Policy, pending an investigation by the National Liability Bureau (NAB); and (ii) the alleged savings in the tariff of the 2002 IPP policy is already under investigation by the NAB. The NAB may need to review and verify the negotiation and signing process of agreements, including an arbitration agreement. The NAB may also indicate whether it objects to signing these agreements and making IPP payments under the 2002 policy.

Sources said the Ministry of Energy subsequently referred the ECC decision, approved by the federal cabinet, to the NAB on May 25, 2021. In response to a letter from Energy Ministry, NAB shared its views in a letter dated June 8, 2021. The decision of the Cabinet required a review of the process completed by the Power Division; Although the NAB acknowledged that the 2002 IPP policy was investigated, it declined to investigate the process or to verify or report whether it had any objections to these agreements or to IPP’s payments under those agreements.