Agreement Reached with AGL: DG Audit (Energy) Pursues Comprehensive Documentation
SCOOP: Attock Gen Limited's Secret Deal Unveiled - Business Recorder Exposes All
Let's dive into the juicy details of the controversial negotiated agreement between Attock Gen Limited (AGL) and the Government of Pakistan, spilled by our reliable sources.
Striking a deal with the Central Power Purchasing Agency-Guaranteed (CPPA-G), AGL has managed to change the existing tariff structure for their project, following lengthy negotiations through the Task Force on Energy, which was also approved by the Federal Cabinet.
The Inspecting Officer (IP-MoE), Taimur Khan, from the Power Division in Islamabad, has requested documents that shed light on this secret agreement, including the Cabinet decision regarding AGL, a summary of the negotiated agreement, and the implementation status of AGL's revised pact.
AGL Goes All-In with Revised Tariff:
Recently, NEPRA held a public hearing on AGL's joint application with CPPA-G. Notably, none of the parties objected to this deal, as it was hammered out at the top level. The CPPA-G and 156MW AGL submitted their joint application for tariff revision in line with the agreed terms with the Task Force on Energy, subject to scrubbing proceedings for abnormal profits.
Both parties agreed on a "hybrid take and pay" mechanism, similar to other Independent Power Producers (IPPs). In their tariff revision petition, they requested NEPRA to accept the application, revise the indexation mechanism, cap insurance costs, and change the "Take or Pay" to a "Hybrid Take and Pay" model.
Secret Clauses Revealed:
As per the details unearthed, the newly-revised tariff incorporates the following significant changes:- 50% reduction in the working capital component.- RoE and RoEDC fixed at 17% per annum in PKR, using a fixed exchange rate of PKR 168/USD, eliminating future dollar indexation.- A 10% reduction in monthly maintenance costs, alongside revised O&M indexation mechanisms.- Insurance costs capped at 0.7% of the approved Engineering, Procurement, and Construction cost.
Moreover, AGL is now authorized to sell electricity directly to Bulk Power Consumers (BPCs) under Clause 2.1(i) of the agreement. The Fuel Cost Component (FCC) formula was also revised, albeit the specifics are not disclosed in available records.
All Eyes on the Audit:
The Director General Audit (Power) has demanded the entire agreement record, indicating concerns over transparency and adherence to the new terms. This audit is crucial, especially after AGL and other IPPs agreed to transition toward a "hybrid take-and-pay" model as part of broader energy-sector reforms.
The government's efforts to minimize power purchase costs and curb circular debt through revised tariffs for IPPs, including AGL and 10 bagasse-based plants under the 2002 Power Policy, are in full swing. The Task Force on Energy has played a pivotal role in negotiating the terms that strike a balance between returns for investors and affordability for consumers.
Copyright Business Recorder, 2025.
- The revised tariff of Attock Gen Limited (AGL) includes a 50% reduction in the working capital component following negotiations.
- AGL and Central Power Purchasing Agency-Guaranteed (CPPA-G) have agreed on a "hybrid take and pay" mechanism, similar to other Independent Power Producers (IPPs).
- The Inspecting Officer (IP-MoE), Taimur Khan, has requested documents related to AGL's secret deal, including the Cabinet decision and a summary of the negotiated agreement.
- The Government of Pakistan's efforts to minimize power purchase costs and curb circular debt include revised tariffs for industries like AGL and 10 bagasse-based plants under the 2002 Power Policy.
- The Director General Audit (Power) has demanded the entire agreement record of AGL, expressing concerns over transparency and adherence to the new terms.
