Hub Power Company Limited (HUBCO) and Central Power Purchase Agency (Guarantee) Limited have signed an agreement in accordance with the Memorandum of Understanding previously reached in August , 2020.
As per the agreement, the payment of due payments to HUBCO is an integral part of the agreement, and the provided payment mechanism is distributed as: 40% of the payments is due within 30 working days from the date of signing the agreement (including 1/3 of the funds and 2 / 3, financial instruments of the investment bank Social & Sukuk), and the remaining 60% is payable within 6 months thereafter by the same payment method. In addition, all invoices will be paid in the order in which they are submitted, so that invoices that have not been paid in the longest period of time (in whole or in part) will be paid in the first place.
HUBCO has also agreed to reduce the current component of fixed operating costs by 11% while maintaining the current indexation. At the same time, HUBCO agreed to suspend the Indexation of US dollar exchange rate and the US consumer price index for the project and fix the same at the TT / OD exchange rate sold by the National Bank of Pakistan PKR / USD.
Exchange Rate Indexation will continue until US$ hits level of Rs 168.60 / dollar. According to the notice, both parties also agreed, immediately upon signing the agreement, to initiate negotiations and discussions in good faith and to make every effort to achieve an early termination of the PPA, which would be beneficial to both parties, resulting in compensation for the company, while saving large sums for the government in lieu of capacity payments before the PPA expires.
THUBCO and CPPA also agreed that some outstanding disputes should be resolved through arbitration in accordance with the PPA.
The terms of the agreement are subject to approval by the Hubco Board of Directors and the Federal Cabinet, and a final binding agreement.
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