PAKISTAN Law and Practice Contributed by: Nadir Altaf and Muhammad Fahim Khan, RIAA Barker Gillette
3.3 Approvals to Construct and Operate Generation Facilities The terms and conditions under which a gen- eration facility can be set up are provided in the generation licence of each generation licensee (see 1.1 Law Governing the Structure and Own- ership of the Power Industry ). The typical terms and conditions include: • the term of the licence; • requirement to pay the licence fee; • the approved specifications of the genera- tion facility, including capacity, location and technology; • the approved offtake arrangement; • the approved offtakers/consumers; • requirement to only charge the tariff deter- mined by NEPRA; • obligation to work towards implementation and operation of a “Competitive Trading Arrangement” (which may be read now as a reference to the CTBCM model); • requirement to comply with the “applicable documents”, which include the NEPRA laws, Grid Code and the Distribution Code; • requirement to comply with the Generation Performance Standards Rules; • prohibition on abandonment of the generation business/facilities; • requirement to maintain records; • requirement to comply with the applicable environmental standards; • obligation to provide information to NEPRA; and • obligation to design, manufacture and test the facility according to the latest International Electrotechnical Commission, the Institute of Electrical and Electronics Engineers or any equivalent standards.
the federal government (approval is only required if the project is being developed pursuant to a government policy); (c) lease agreement – entered into with the lessor, if the land is not acquired by the developer as a freehold; • water use agreement – entered into with the water supplier; and • fuel supply agreement – entered into with the fuel supplier, if applicable. Consents required as part of the implementation agreement include: • commitment from the SBP to make available foreign currency for the project’s require- ments; • SBP approval of the foreign currency loans; • SBP approval for remitting and retaining the company’s revenue in foreign currency; • consents required from NEPRA under the NEPRA Act; • confirmation from the Ministry of Finance or the federal tax authority (Federal Board of Revenue (FBR)) that, during the term, the company will not be taxed in Pakistan on its profits and gains from electric power gen- eration; however, this exemption no longer applies to generating companies receiving letters of support after 30 June 2023; • statutory notifications and permits from the Ministry of Commerce or the FBR for importa- tion of plant, machinery and supplies; • statutory notification for reduction in stamp duty and registration fees; and • special sanction by the provincial govern- ment under Section 34 of the Electricity Act 1910 permitting the company to connect the complex to the earth, etc.
253 CHAMBERS.COM
Powered by FlippingBook