Govt plans Nandipur, Guddu power plants’ handover to PSO

ISLAMABAD: The government is contemplating a transaction to transfer the controlling stake of Nandipur and Guddu power generation plants to Pakistan State Oil (PSO), involving a transaction valued at around Rs100 billion.

The Privatization Commission (PC) has formally recommended the exclusion of Nandipur and Guddu power plants from the privatization list. A senior official from the PC confirmed that a summary is underway for presentation to the Cabinet Committee on Privatization (CCoP). Upon CCoP’s approval, the proposal will proceed to the federal Cabinet for final endorsement to delist the power plants.

Sources indicate that the decision to deviate from the initial privatization plan stems from the circular debt issues faced by the two SOEs, necessitating a payment of Rs100 billion to gas marketing companies—Sui Northern and Sui Southern.

In this innovative approach, the profit-making state-run entity, PSO, will acquire shares worth Rs100billion, effectively addressing the circular debt burden of the two power plants. As a result, the gas-fired power plants are set to be removed from the PC’s list, pending approval from the federal cabinet.

To address the persistent circular debt issue in the energy sector, the PC, in collaboration with the Ministry of Energy authorities, has decided to exclude the Nandipur and Guddu power plants from the privatization list.

Simultaneously, the government is taking steps to settle the outstanding Rs100 billion payment for these power plants, currently parked in the PSO through Re-Gasified Liquefied Natural Gas supply.

The innovative settlement, allowing PSO to acquire controlling stakes in these power plants, is anticipated to bring relief to the energy sector, particularly for PSO, which has been grappling with financial challenges.