Foreign Govts Unhappy With Pakistan’s Treatment of IPPs

Pakistan has started getting worrying messages from other foreign governments over recent “one-sided” deals with Independent Power Producers (IPPs). The German government, particularly, has voiced reservations about the Negotiated Settlement Agreement (NSA) reached with Rousch Power Project Limited (RPPL), reported Business Recorder. Under the NSA, RPPL is set to transfer its energy complex to Pakistan for a nominal sum, payable in local currency. The agreement stipulates that the government will pay the company Rs. 5.5 billion for early termination of its operations during the Out-of-Market Expenses (OFME) period and Rs. 2.8 billion to maintain the facility until it is officially transferred. German official Georg Klussmann, Head of Division for Pakistan at Germany’s Federal Foreign Office, has communicated with Pakistan’s embassy in Germany that his government finds the NSA concerning. According to Klussmann, a shareholder in RPPL (Siemens) doesn’t like the current settlement with foreign investors while there is room for further negotiations to reach a mutually agreeable resolution. Germany has warned that the prolonged nature of these negotiations could impact future bilateral relations and erode the trust of German businesses and investors in Pakistan. Pakistan’s Charge d’Affaires in Berlin has urged continued engagement with German officials to explore an amicable solution.