According to an official of Ministry of Energy and Power, Commercial banks have refused to finance energy projects due to record Circular debt in the energy sector, which stood at Rs. 2.327 trillion rubles as of August 31, 2021.
The Ministry of Energy has applied for a cash development loan for Jamshoro Power Company Limited (JPCL-GENCO-I) for 2 x 660 MW imported coal-fired power plants, which began implementation with funding from the Asian Development Bank (ADB).
According to the sources, The Central Power Purchasing Authority (CPPA-G) is in financial distress due to a huge debt problem and has the inability to pay off Chinese investors obligations. The Private Power and Infrastructure Board (PPIB), which is responsible for promoting energy investors, regularly writes letters to the Ministry of Energy and CPPA-G asking them to make payments to the Chinese company, but nothing has been done due to the financial crisis.
On the other side, recovery of Electric Distribution Companies have also decreased in the 2020-2021 fiscal year compared to the 2019-2020 years, leading to rise in Circular Debt.
ECNEC discussed a proposal from the Ministry of Planning, Development and Special Initiatives “Jamshoro Power Company Limited (JPCL -GENCO -I) Cash Development Loan for a 2 x 660 MW coal-fired power plant project” and agreed that the Ministry would discuss the matter with the finance department while agreeing on project financing from the Central Bank of Pakistan / other commercial banks.
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