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Engro Powergen Thar Private Ltd. seeks urgent financial assistance

Web DeskMay 28, 2024 09:48 AMbusiness
  • EPTL requests Rs65 billion settlement from CPPA-G to avoid default
  • Mounting dues of Rs76 billion pose operational risks for EPTL
  • EPTL emphasizes immediate action needed from CPPA-G for financial stability
Engro Powergen Thar Private Ltd. seeks urgent financial assistanceImage Credits: brecorder
Engro Powergen Thar Private Ltd. faces a critical financial situation, requesting urgent settlement of Rs65 billion from CPPA-G to avoid default and ensure operational continuity. The mounting dues of Rs76 billion highlight the importance of timely payments in sustaining large-scale energy projects.

Engro Powergen Thar Private Ltd. (EPTL) is currently facing a critical financial situation, prompting an urgent request to the Central Power Purchasing Agency Guarantee Limited (CPPA-G) to settle its outstanding dues of Rs65 billion. This request aims to prevent a potential default on upcoming debt obligations that could severely impact EPTL's operations and relationships with lenders and suppliers, including the fuel supplier.

In early April, EPTL notified CPPA-G about the impending debt servicing obligations for EPTL and SECMC (Thar Coal supplier) due in late May. They sought a payment of at least Rs42 billion to address these obligations and operational needs. However, as of May 24th, EPTL has only received Rs17 billion out of the requested total disbursement of Rs350 billion allocated to power producers during this period.

The gravity of the situation is evident in EPTL's mounting dues from CPPA-G, now totaling Rs76 billion, with Rs65 billion past due. Just a year ago, the overdue receivables stood at Rs39.5 billion. This surge in outstanding payments has caused EPTL's recovery percentage to drop to 86%, below the typical range of 89% to 90% for CPEC projects managed by CPPA-G. The year-to-date recovery percentage for 2024 is a concerning 75%.

Recognizing the urgency of the matter, EPTL has stressed the critical need for immediate action from CPPA-G to expedite the clearance of overdue receivables. They have specifically requested an additional payment of Rs15 billion by May 29th to facilitate the successful servicing of debts and ensure operational continuity.

The financial challenges faced by EPTL underscore the complexities of managing large-scale energy projects and the importance of timely payments in sustaining operations. As stakeholders work towards resolving these issues, the industry's resilience and adaptability will be tested, highlighting the significance of effective financial management in ensuring the stability of vital infrastructure projects.

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