UEP Wind Power (Private) Limited has asked the Central Power Purchasing Agency-Guarantee (CPPA-G) for Rs. 5.824 billion to cover its financial obligations through December 2026, warning that a cash shortfall could put the 99-megawatt CPEC project at risk of default.
In an October 19 letter to CPPA-G’s chief executive, the company said its projected cash flow was insufficient to meet debt repayments, operations and maintenance costs, sales tax, insurance and other expenses. It requested payment in installments according to a month-by-month schedule.
The largest projected expense is Rs. 2.651 billion to repay a working-capital loan. Another Rs. 1.834 billion is due to China Development Bank for debt servicing. The company also listed Rs. 841.38 million for its operations and maintenance operator, Rs. 323.59 million in sales tax, Rs. 125.94 million in operating and administrative expenses, and Rs. 48.47 million for insurance.
Under the requested schedule, UEP Wind Power needs about Rs. 628.14 million in October, Rs. 179.61 million in November and Rs. 5.016 billion in December. Most of the debt and working-capital loan payments fall due in December.
Receivables Projected to Reach Rs. 9.3 Billion
The company said unpaid invoices were expected to rise from Rs. 8.117 billion in October to Rs. 9.317 billion by December. Overdue invoices were projected to increase from Rs. 6.532 billion to Rs. 8.147 billion over the same period.
UEP Wind Power said continued CPPA-G support had enabled it to settle long-overdue liabilities to its operations and maintenance operator. It is now seeking priority for repayment of a shareholder loan, which the shareholder has advised should be repaid in full by December 31.
The company also described its Rs. 323.592 million sales tax liability as a mandatory payment to the national exchequer due by December 22. It said it had entered its tenth year of operation but had not distributed dividends to shareholders.
CPEC Power Projects Face Payment Pressures
Sources cited in the report said CPPA-G owes around Rs. 500 billion to Chinese power plants established under CPEC. They attributed the payment pressure in part to power distribution companies’ recoveries falling short of the 100 per cent of billed amounts required under National Electric Power Regulatory Authority directives.
Growing receivables have made it harder for power projects to meet debt repayments and other obligations. UEP Wind Power said timely payments were necessary to keep its project operating without disruption and avoid default.
The company copied its letter to the Chinese Embassy in Islamabad, the Power Division secretary, the managing director of the Private Power and Infrastructure Board, CPPA-G’s chief financial officer and the CPEC Authority.
