NEPRA Approves Tripartite Agreement for KAPCO’s Electricity Sales

The National Electric Power Regulatory Authority (NEPRA) has sanctioned a tripartite agreement. This agreement involves the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G), Kot Addu Power Company Limited (KAPCO), and the National Grid Company of Pakistan Limited. It establishes the framework for electricity transactions originating from KAPCO’s power generation facility.

KAPCO communicated this development through a notification submitted to the Pakistan Stock Exchange (PSX) on Tuesday.

According to the notice, NEPRA, in a letter to CPPA-G dated May 19, 2025, officially endorsed the Tripartite Power Purchase Agreement (TPPA) between CPPA-G, KAPCO, and the National Grid Company of Pakistan Limited, along with all related schedules.

The company clarified that the TPPA’s effectiveness is contingent upon fulfilling specific requirements outlined by NEPRA.

The notice further stated that the directions from NEPRA, as detailed in their letter of May 19, 2025, must be adhered to before the TPPA can be signed. These directions encompass conducting an Initial Capacity Test (ICT) and a Heat Rate Test (HRT) to establish benchmark efficiency. An independent engineer will assess and determine Simple Cycle Efficiency/Heat Rate metrics, which must be submitted to NEPRA alongside the ICT and HRT reports.

KAPCO indicated that upon successful fulfillment of these prerequisites, the TPPA will become fully operational for the power plant’s operational phase.

Last month, following extensive discussions during a public hearing on April 8, 2025, NEPRA provisionally approved a tariff for KAPCO on a Take-or-Pay basis.

KAPCO, incorporated in Pakistan on April 25, 1996, as a public limited entity, primarily owns, operates, and maintains a multi-fuel power station. This station comprises fifteen generating units with a total nameplate capacity of 1,600 MW, situated in Kot Addu, Punjab.

The company’s sole client for the electricity it generates is the Water and Power Development Authority (WAPDA), as stipulated under a Power Purchase Agreement (PPA).