Govt sets out to privatise two RLNG plants
By Staff ReporterFriday – July 24, 2020
According to an official statement, privatisation minister Mohammad Mian Soomro and special assistant to prime minister (SAPM) Nadeem Baber met with the heads of international and local banks at the State Bank of Pakistan (SBP), 11 banks were requested to participate as lenders to successfully complete the subject transaction.
Privatisation minister Soomro said that considering the importance of the privatisation of these power plants for the incumbent, the privatisation commission will appreciate the cooperation of commercial banks/lenders to facilitate a successful transaction within the envisaged timeline.
The government of Pakistan (GoP) is considering divesting up to 100 percent of its shareholding in NPPMCL to a potential investor, along with management control.
It was also discussed that negotiation with the older independent power producers (IPPs) is in progress to find ways to address the cost of generation.
The banks proposed that the government may consider the terms of tariff to encourage bank interest in the subject transaction.
The heads were to raise the requisite long-term financing within the benchmark approved by national electric power regulatory authority (NEPRA), and also support potential bidders in obtaining no objection certificates (NOCs) for continuation of working capital lines, which is in addition to the long-term financing.
The potential bidders will be required to re-finance GoP/Pakistan development fund limited (PDFL) funding and NPPMCL’s existing commercial debt through local and/or foreign debt financing.
NPPMCL was formed with an objective to reduce the electricity/power demand and supply gap in Pakistan.
The meeting was attended by the board members, members of financial advisory consortium (FAC), SBP deputy governor, presidents and group chiefs of National Bank of Pakistan (NBP), Muslim Commercial Bank (MCB), United Bank Limited (UBL), Allied Bank Limited (ABL), Habib Metropolitan, Bank Al Habib, Bank Alfalah, Bank of Punjab (BoP), Habib Bank Limited (HBL), Meezan Bank and Faysal Bank.