The Privatisation Board on Wednesday allowed raising Rs103.8 billion debt from local banks through competitive bidding to replace the government’s financing before privatisation of much-trumpeted two LNG-fired power plants.
The board recommended that Expression of Interest (EOI) may be invited from scheduled banks and Development Financial Institutions (DFIs) through advertisement to raise Rs103.8 billion debt.
The board approved to raise the debt for a period of seven years at a maximum interest rate of Karachi Interbank Offered Rate (KIBOR) +1.8%. The National Electric Power Regulatory Authority (Nepra) has set the KIBOR plus 1.8% limit against the wish of the Privatisation Commission that had initially recommended KIBOR plus 3.5% interest rate.
The last Pakistan Muslim League-Nawaz (PML-N) government had funded the Haveli Bahadur Shah and Balloki Power Plants out of the Pakistan Development Fund Limited (PDFL) – being set up with $1.5 billion Saudi Arabian grant.
After raising the debt that will replace the PDFL funding, the government would then move to the next step of selling the 30% equity stakes of both the power plants. The Pakistan Tehreek-e-Insaf (PTI) government wanted to privatise these plants by June 2019.
